Ericsson’s Inefficiency Seen Leading to Further Job Reductions
- Revenue per employee trails Cisco, other equipment makers
- Stock plunges after quarterly sales, profit miss estimates
Ericsson Shares Drop Most in 9 Years, What's Next?
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The sales slump that triggered a plunge in Ericsson AB shares probably will lead to further job cuts at the Swedish maker of wireless-phone network equipment.
Revenue per employee in dollars -- the currency in which a majority of Ericsson’s business is priced -- has been in decline since 2012, according to data compiled by Bloomberg, and the company brings in much less in sales by that measure than Cisco Systems Inc. That means interim Chief Executive Officer Jan Frykhammar will need to cut a lot more jobs than the 3,000 announced last week, said Neil Campling of Northern Trust Capital Markets.