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Ericsson Earnings Disappoint, Shares Take a Dive !

Ericsson reported lower than expected fourth-quarter core earnings as sales of 5G equipment slowed in high-margin markets such as the United States, sending the Swedish company's shares to their lowest since 2018.

Ericsson is the latest tech company to show the impact of customers tightening belts amid concerns about a global economic slowdown. Ericsson's shares were down 8% early on Friday. They have halved since February last year. The company has already announced plans to cut costs by 9 billion crowns ($880 million) by the end of 2023.

Chief Financial Officer Carl Melander told Reuters that the cost cutting would involve reducing consultants, real estate, and employee headcount. "It's different from geography to geography, some are starting now, and we'll take it unit by unit, considering the labor laws of different countries," Melander said, referring to the cuts. He declined to say if the job cuts would be similar to 2017 when Ericsson laid off thousands of employees and focused on research to return the company to profitability. Ericsson said it expects a fall in margin in its Networks business to persist through the first half of 2023 but the effect of cost savings to emerge in the second quarter.

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