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Business

Ericsson mulls cutting a quarter of its global workforce

Swedish mobile networks company Ericsson may lay off tens of thousands of employees in a bid to speed up its cost-cutting program, a local newspaper has warned. The firm has had to grapple with fierce competition.

Mobile telecom gear maker Ericsson might slash around 25,000 positions outside Sweden as part of its current savings program, the Svenska Dagbladet reported on Thursday, citing sources at the company.

The firm now employs about 109,000 people worldwide. It has been facing mounting competition from China's Huawei and Finland's Nokia and has suffered from weak emerging markets and falling spending by telecoms operators, with demand for next-generation 5G technology still years away.

Ericsson said in July it would accelerate measures to meet its target of doubling its 2016 underlying operating margin of 6 percent as it aimed to reach an annual cost reduction of at least 10 billion crowns ($1.2 billion, 1 billion euros) by mid-2018.

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No impact on R&D

The Swedish firm added actions would primarily be taken in service delivery, while research and development would be largely unaffected by any cuts.

Ericsson had posted a second-quarter loss of $120 million on falling sales, with overall shipments declining by 8 percent year on year.

Chief Executive Borje Ekholm said he was not satisfied with the firm's underlying performance and warned of "an increased risk of further market and customer project adjustment."

"One key component in our focused business strategy is to reduce costs and increase efficiency."

hg/jd (Reuters, AP)

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