Nokia, Ericsson speed cost cut plans
BERLIN - The two largest European makers of telecommunications equipment, Nokia and Ericsson, disclosed plans yesterday to continue or accelerate cost-cutting efforts in the face of rising competition, internal reorganizations, and weak demand in North America.
Nokia, the largest seller of mobile phones by volume, said it planned to cut more than the $1.43 billion it had previously planned to trim from its operating expenses by 2013. The company, based in Espoo, Finland, did not specify a new target. It revealed the new plan as it reported a loss of $530 million in the second quarter.
Ericsson, the largest maker of telecom networking equipment, said it took a restructuring charge of $202 million in the quarter, more than some investors had been expecting, to pay for layoffs in Sweden.
The news created heavy trading in shares of both companies in Europe. Ericsson fell nearly 10 percent, while Nokia rose 2.5 percent as investors welcomed the firm’s intention to increase austerity measures.