The number of employees at Ericsson could decline by 25,000, according to data to SvD. The revelation received during Wednesday Ericsson shares rise sharply on the Stockholm Stock Exchange by over 6 percent. The stock market’s stark conclusion is that cuts among staff equals cost savings. It ultimately means higher profits.
– It is clear that SvD’s data is behind the price increase. But if Ericsson itself had advertised it as the stock had gone up even more, says Martin Nilsson, telecom analyst at Nordea.
To reduce staff by 25 000 employees is a perfectly reasonable measure Ericsson, he believes, is ranked as one of Sweden’s leading telecom analysts.
– This is a highly possible scenario for Ericsson’s management. If there is further evidence of the shares will continue to rise.
Martin Nilsson compares Ericsson and Finland’s Nokia. They have about the same turnover and according to him reminds companies’ development on the other.
– Nokia today has 112,000 employees, but to be down to 90 000. About Ericsson cut 25,000 employees end up at the same level. If Nokia can have the cost base may Ericsson also there, he says, and adds:
– There is nothing that says that Ericsson could not continue to operate as a company, or the need to stop with any great product, just it.
the information on the dramatic savings of Ericsson in the same direction as the analyzes of the company, Nordea did last week. According to Martin Nilsson, there are two different scenarios for the telecom giant’s future.
– If Ericsson would have a cost base that corresponds to Nokia, and also takes back the cost structure as it had 10 years ago, they would share could rise and reach a price target of 90 crowns.
the second scenery is much bleaker for the telecom giant.
– If Ericsson does not do anything, and sales continue to fall, the share drop to 50 crowns. There are the two extremes of what can happen to the company in the coming years, he says, adding:
– A decrease of 25 000 employees is very similar to the first option, the 90-kronor scenario that we wrote about in our analyzes.
Albin Rännar, director of market surveillance at Shareholders’ Association, is concerned about Ericsson.
– It is worrying that they might have to terminate people. Confidence Ericsson is torn, it is strange that the Chairman Leif Johansson opted out of the company’s shares, and that top managers sold their. There are ominous signals.
The company’s luster has slowed, he notes. Although it has been one of Sweden’s fine old industrial so it does not feel completely stable longer, he says, and repeats the strong criticism of Hans Vestberg new assignment as head of the Swedish Olympic Committee.
– If the is crisis, then president take on the company. It may appear to be demanding, but in principle it is hoped that there is no time for family, leisure or a hobby. We think that the least we could expect is that Hans Vestberg steps back after criticism and resignation, he said.
Ericsson wanted Wednesday not comment SvD’s data a decrease of 25 000 employees, but refers to previous statements that Ericsson has an efficiency program which the company follows.
– We do not comment on rumors and speculation regarding numerärer. If it affects our staff and we will inform them first, says Karin Ronander on Ericsson’s press department.