ERIC announced it will shave 5000 jobs (1000 of which will be in Sweden), in an effort to reduce spending by over $1 billion in 2009.
Ericsson will contribute $1.1B to a joint venture with STMicroelectronics. The joint venture will combine the wireless chip business of STMicro and the software business of Ericsson to supply 4 of the 5 largest cell phone manufacturers. STMicro will contribute $1.2B to the joint venture.
Ericsson cut its Q3 earnings forecast as there has been an unexpected shift in the business mix resulting from lower sales in mobile network upgrades and expansions. The company expects sales of 43.5 billion Swedish Kroner, which is a marginal increase of six percent from SEK 43.5 billion last year. Further, the operating income of the company fell by 36 percent to SEK5.6 billion.