Ericsson plans to cut staffing to 60,000 by 2003, rather than its previous target of 65,000. Already, since April 2002, it has cut staffing from 82,000 to 76,000.
This follows a Q2/2002 loss of EUR379.7m (down from EUR1.5bn a year ago) on sales of EUR4.1bn (down 31% on a year ago, but up from EUR4.0bn in Q1/2002).
The telecom and wireless downturn is showing scant signs of a turnaround, says CEO Kurt Hellström. "We will continue reducing our costs until we can break even at sales levels around SEK120bn [EUR13bn]," he says. "By the end of next year, we believe we will have a low enough cost base to return to profit."
At end-June, long-term liabilities were SEK37.4bn and current liabilities were SEK85.3bn. Ericsson plans to repay up to SEK22bn (EUR2.38bn) worth of debt over the next six quarters: SEK8bn worth of short-term debt and SEK14bn in long-term loans.
In the meantime, Ericsson wants to sell 8bn new shares to raise EUR3.25bn, a SEK30bn rights issue will be used partly to repay debt. But the plan to sell new shares has angered shareholders as it will significantly dilute the value of its shares.
