Ericsson reported lower-than-expected profit today and announced sweeping job cuts amid expectations it will be a flat market this year.
The world's biggest mobile network maker said it would axe costs of about 4 billion Swedish crowns (€423 million) a year to adapt to little or no growth in mobile infrastructure.
Ericsson shares dropped 1.3 per cent to 14.14 crowns by 11.39am, with the broader market up 2.2 per cent.
The Swedish firm, which shed thousands of jobs and recorded huge losses as the IT bubble burst early this decade, said it planned to cut about 1,000 jobs in its home market.
It said the full effect of the savings would come in 2009.
As of December, Ericsson had 74,000 employees, just under 20,000 of whom were employed at its operations in Sweden.
The cuts mark the first major job losses in Sweden in at least a couple of years. The economy has been booming but is widely expected to slow down as global conditions worsen.