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Ericsson aims to cut 40pc of real estate costs

STOCKHOLM: Swedish telecoms equipment maker Ericsson wants to cut 40 percent of its real estate costs by the middle of 2004 as the company slashes spending to return to profit in a shrinking market.

Ericsson's internal bi-weekly "Contact" said on Monday real estate costs, which included rent, furniture and cleaning, generated five percent of the group's total costs, which amounted to 98.6 billion crows in 2002.

To return to profit sometime this year, Ericsson, the world's biggest producer of mobile networks, will have reduced its workforce to below 60,000 people at the end of 2003 from 107,000 at the start of 2001.

The company has been deep in the red for nine straight quarters as its main telecoms operator customers put investment on hold amid a slow global economy and, in some cases, the need to service piles of debt.

As part of the real estate efficiency programme, Ericsson decided to move its corporate headquarters, for 63 years in the centre of Stockholm, to the suburb of Kista this year. -Reuters