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Ericsson posts huge loss after year of job cuts

Swedish telecoms giant Ericsson lost 18.9 billion kronor ($2.5 bln) in the last three months of last year, its fifth straight quarter in the red, dampening hopes of a promised turn-around.

Ericsson posts huge loss after year of job cuts
Chief executive Börje Ekholm explains the result at its headquarters in Kista, Stockholm. Photo: Jonas Ekströmer/TT
The loss compared to a 1.6bn kronor ($200m) loss in the last three months of last year, and was more than most analysts had predicted. 
 
“The focus during 2017 has been on reshaping overall strategy and on improving company structure and performance,” explained chief executive Börje Ekholm.
  
“2017 was also the year when 5G went from vision to real business opportunities while we at the same time had good traction for our 4G portfolio,” he continued.
   
“We are fully committed to our plans and our targets and expect to see tangible results of our turnaround in 2018.”
 
He said the company had reduced the number of personnel by “close to 15,000” in 2017, among them 3,000 job losses in Sweden announced in October 2016, with factories in Kumla and Borås worst hit.
The Svenska Dagbladet newspaper reported in August that Ekholm was planning to cut 25,000 more positions outside Sweden, but as yet 
 
The company’s shares were down more than seven percent by late Wednesday morning, as the market digested the total loss for the year of 35.1 billion kronor ($4.5bn). 
 

SWEDEN AND UKRAINE

Ericsson suspends all Russia operations indefinitely

Swedish network equipment maker Ericsson said Monday that it was suspending all of its Russian operations over the war in Ukraine for the foreseeable future.

Ericsson suspends all Russia operations indefinitely

The telecom giant already announced in late February that it would stop all deliveries to Russia following Moscow’s February 24 invasion of Ukraine.

“In the light of recent events and of European Union sanctions, the company will now suspend its affected business with customers in Russia indefinitely,” Ericsson said in a statement.

The company added that it was “engaging with customers and partners regarding the indefinite suspension of the affected business.”

“The priority is to focus on the safety and well-being of Ericsson employees in Russia and they will be placed on paid leave,” it said.

READ ALSO: How has Sweden responded to Putin’s war in Ukraine so far?

Hundreds of Western firms ranging from Ikea to Coca-Cola, Goldman Sachs and McDonald’s have stopped operations in the country since the invasion, with French banking group Societe Generale announcing Monday it was selling its stake in Russia’s Rosbank.

Ericsson has around 600 employees in Russia, and is a “major supplier to the largest operator MTS and the fourth largest operator Tele2,” a company spokeswoman told AFP, adding that together with Ukraine, Russia accounts for less than two percent of revenue.

As a result, the equipment maker said it would record a provision for 900 million Swedish kronor ($95 million, 87 million euros) for the first quarter of 2022 for “impairment of assets and other exceptional costs,” though no staff redundancy costs were included.
Ericsson is due to publish its first quarter earnings on April 14.

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