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Friday, 18 October, 2002, 07:17 GMT 08:17 UK
Ericsson gloomy on sales
Ericsson 3G phone
Ericsson is struggling to catch up with trends
Troubled Swedish mobile phone giant Ericsson has slashed its forecast for sales of mobile phone systems this year by 20% compared with last year due to falling global demand.

Ericsson posted a loss of 3.9bn Swedish kronor ($417m; 270m) in the three months to the end of September, failing to match up to analyst' forecasts.


In the near-term, the industry outlook continues to be uncertain

Kurt Hellstroem
Chief executive
Ericsson
The latest sales target cut is gloomier than the firm's July prediction, when it said sales would drop by 15% this year.

Ericsson has already cut jobs this year to save costs by outsourcing 4,000 jobs from its information technology operations.

Grim outlook

Ericsson, the world's largest supplier of cell phone network equipment, said its sales during the July to September period fell to 33.5bn kronor from 54.5bn kronor last year.

"In the near-term, the industry outlook continues to be uncertain," chief executive Kurt Hellstroem said in a statement.

The company also warned the mobile network equipment market faced "significantly more" falls than the 20% predicted for this year.

Mobile operators have cut investment plans for this year and delayed upgrading networks to save cash.

Ericsson said it had also been saving cash and planned to cut its workforce to under 60,000 by the end of 2003, when it hopes to return to profitability.

In 2001, Ericsson had 107,000 employees.

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 ON THIS STORY
Pia Gideon, Ericsson spokeswoman
"We still consider telecoms as a long-term growth industry"
The BBC's John Moylan
"Rivals Nokia and Samsung have benefited from rising sales of handsets"
See also:

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