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Stockholm (pte043/08.04.2003/16:33) - Carl-Henric Svanberg, new president and CEO of the Swedish telecommunications company Ericsson http://www.ericsson.com , wants to renew his company from the inside out. Svanberg aims to "purify" the burocracy to improve the internal workflow, reported Financial Times (FT) today. This statement suggests that further staff will be fired, though Svanberg did not say exactly how many.
The new Ericsson front man has decided against a capital increase, as he sees no reason for it at this time, Svanberg told FT on his first day at work. Last year, Ericsson took on 3.2bn euros worth of fresh capital following a decrease in turnover. His top priority is to improve the efficiency of the internal workplace. "We're good at developing new products and selling them to our customers," said Svanberg, "but we're not good at organising workflow. We have to become simpler and clearer."
The new head's second priority is to make the company more profitable. For the last nine quarters Ericsson has been making a loss. "We have to start making a profit again, regardless of how the market is developing. Only this way can we take our fate in our hands." Svanberg is guarded about the new mobile phone joint-venture Sony Ericsson: "I have a good feeling about the venture and believe that it would be enriching for us. It would be a shame if it fell apart."
Svanberg commented further that, in the future, fewer employees will be needed at the company. Analysts predict that Ericsson will have to lay off about 10,000 employees in order to come out of its financial crisis. In the last two years, about 50,000 employees have been fired. Currently, Ericsson employs 60,000 people.
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