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Ericsson to cut a further 5,000 jobs; TELECOMS.

Byline: MEGAN DAVIES

SWEDISH telecom group Ericsson yesterday said it plans to cut around 5,000 further jobs as it reported a bigger-than-expected quarterly loss and posted a gloomy outlook.

The cuts mean the group's worldwide workforce will be reduced to around 60,000 jobs by the end of 2003, instead of the previous target of around 65,000, a spokeswoman confirmed.

At present the group employs 76,000.

The group was not immediately able to comment on the impact on UK staff.

The cuts came as the Stockholmbased company, which is the world's largest supplier of cell phone network equipment, also announced its longawaited plans to raise around 30 billion crowns (pounds 2.1bn) by way of a rights issue - when new shares are issued to existing shareholders at a discounted price.

Chief executive Kurt Hellstroem said in a statement, ``In light of our lowered market expectations for this year, we have intensified the cost reductions that we started last year and are substantially ahead of schedule.''

He said the group planned to return to profit ``at some point in 2003''.

For the three months to the end of June, the group reported a pre-tax loss of 3.5 billion crowns (pounds 240m) - worse than market expectations.

Ericsson said cost-cutting measures were having an effect but it warned that demand for mobile systems equipment this year would be even worse than it had anticipated.

Shares in the group, traded on the Stockholm bourse, plunged on their opening after the statement.

Telecoms firms in the UK also slid when the London market opened, with mmO2, Vodafone and BT all trading lower.

A spokeswoman for Ericsson said the company could not give a breakdown of where job cuts would fall but could not rule out losses in the UK.
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Title Annotation:Business
Publication:Western Mail (Cardiff, Wales)
Date:Jul 20, 2002
Words:298
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