By Lisa Burroughes, 4 September 2001 15:08
NEWS Ericsson has warned that it may struggle to reach profitability this year with the company being forced to consider further job cuts. At a strategy and technology summit meeting in London this morning Kurt Hellstrom, CEO of Ericsson, said there was still much that needed to be done before the Swedish company can show positive financial results for 2001. He added that although Ericsson has already made considerable savings through more than 7,000 redundancies this year and other cutbacks "further action would be taken to get it [Ericsson] back to profitability if necessary". The company's CFO Sten Fornell continued the gloom when he told the meeting that it is expecting flat growth for the mobile market in 2001 and 2002. He added that economic uncertainty in Latin America was causing particular concern as investors are pulling out of planned 3G rollouts. "With the weakness in Latin America we have to emphasise the flat," Fornell said. However, Ericsson tried to remain optimistic about the long-term view for the mobile market. Both Hellstrom and Fornell were confident that GPRS and 3G rollouts were continuing in most of Europe, Asia and the US according to forecasts. The company's management team were keen to warn that the rollout of 3G won't be easy. "Naturally there will be drawbacks, it is a very complex technology and it doesn't happen overnight," Hellstrom said.
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