Economy. Ericsson bash with a major new austerity package to meet weaker sales. The union fears that thousands may go only in Sweden. Shares fell hard on the Stockholm Stock Exchange and had at closing dropped 5.6 percent.
– It’s been a tough quarter. The trends we saw in late 2015 and the first quarter of this year, particularly in countries with macroeconomic challenges and currency devaluations, they have intensified during the second quarter, says CEO Hans Vestberg.
The sales overall fall in eleven per cent in markets like Russia, revenues have almost ceased. The underlying profit plummets even more, 40 percent. And Vestberg sees no bright spots for the rest of the year.
Pressed management
Pressed by the stock market, he makes a big new austerity package.
– it is our ambition to continue to gradually increase our profitability, said Vestberg.
to achieve doubles Ericsson now its savings program. It will mean thousands more layoffs across the Group was unclear at the present time, according to Hans Vestberg. Only in the second quarter disappeared 3800 services.
– There is no country that will be excluded from this, says Vestberg.
Of the total of 116 000 employees there are over 15,000 in Sweden. Based on previous similar size austerity counting tray with four-digit reductions in the number of services in Sweden alone.
Per Norlander, Chief union negotiator for the academics at Ericsson, is critical to the way that management faces a worse sales. The same medicine as before, with excessive short-term cost cutting lapping the development of products the company will live on in a few years, he believes
– But we need to survive tomorrow too, he says.
He thinks that Ericsson’s management has given too much skewed to the economic.
– There is too little engineer weight in the lead right now and too much economics weight, says Norlander.
questioned manager
Hans Vestberg is now being questioned by more and more analysts if he is the right man to push Ericsson on.
TT: How does it feel?
– I think that we have an understanding of it, of course, the share price has not had a good performance, the middle and the management’s job is to further develop Ericsson.
Confidence has also been nibbled at the edge of all the internal anonymous leaks to the press in which management has been discredited.
TT: Why is that do you think?
– I can not answer that question, I just want to say that in a company that does so much change as we do. . . If you look back the past 1.5 years has almost 30 000 employees had to leave us, we put a new structure for the company. It is obvious we are changing for many people, positions, both for managers but also for employees. So there are some concerns in the company.
Ericsson’s main owners, Investor and Industrivärden is now agreed that Vestberg must quit as president, but have trouble finding a suitable successor who is willing to take the job in telecom giant , experience the industry today.
According to the newspaper’s informant, it is uncertain how long it will be before a change of CEO can be implemented.
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