(Reuters) – Ericsson (ERICb.ST), the world’s top mobile telecoms equipment maker, is to cut jobs at its North American operations as part of a continued drive for greater efficiency in a business seeing slower sales.
The number of job losses would be less than 10 percent of its 14,800 workforce in the region, the company said on Friday.
While Ericsson had a strong 2011, core profit slumped in the final quarter due to a slowdown and a focus on gaining market share that cut into margins.
One of the biggest disappointments in the fourth quarter was the U.S. market, where sales fell 20 percent year on year and were down 7 percent on the previous three months.
“We are constantly examining workforce needs to ensure we have the best people, with the right competencies, in the right places,” Ericsson said in a statement.
Ericsson blamed the fourth-quarter U.S. sales slump on a temporary lull in investment after a period of heavy spending, as well as the effects of operator consolidation.
Network equipment makers face a tough year as operators cut spending due to the global financial crisis. Price pressure, largely from Chinese rivals, has also squeezed the industry in recent years.
Nortel Networks went bankrupt in 2009 while others have struggled to turn a profit.
Loss-making Nokia Siemens Networks NOKI.UL is cutting some 20,000 staff from its global operations — around a quarter of its workforce — to reduce costs by around 1 billion euros ($1.33 billion) a year.
In 2011, Alcatel-Lucent (ALUA.PA) posted its first annual profit since it was formed via a merger in 2006.
Many analysts expect the number of key operators in the industry to fall in coming years, with Ericsson and China’s Huawei HWT.UL and ZTE (000063.SZ) the most likely survivors.
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(Reporting by Simon Johnson and Olof Swahnberg; Editing by David Hulmes)
