logo
Plus   Neg
Share
Email

Ericsson To Speed Up Restructuring Of BSS; Estimates Costs Of SEK 6.1 Bln In Q4

Ericsson's (ERIC) announced the company's focus on simplifying and stabilizing the business during the three first quarters of 2018 resulted in stronger gross margins and a stabilizing topline. However, the Business Support System (BSS) area is not showing satisfactory progress jeopardizing Segment Digital Services' overall profitability target for 2020, the company said.

Ericsson has now decided to pursue additional measures to speed up the restructuring of the BSS business, including its product and contract portfolio. Provisions for the cost for executing on these planned measures will, together with necessary contract loss provisions, negatively impact operating income in fourth quarter 2018 by 6.1 billion Swedish kronor, mainly impacting gross margin. Out of this amount, 3.1 billion Swedish kronor, is treated as restructuring charges.

Ericsson noted that further restructuring charges related to the planned measures, including related headcount reductions, estimated to 1.5 billion Swedish kronor are anticipated in 2019.

Ericsson said the planned measures will materially contribute to reducing losses in the BSS area already in 2019 and de-risk the plan. The company's current assessment is that the reshaped BSS strategy will set Segment Digital Services on a strong path to achieving the operating margin targets (excluding restructuring) of low single-digit in 2020 and 10 - 12 percent no later than 2022.

For comments and feedback contact: editorial@rttnews.com

Business News

Quick Facts

Editors Pick
erman software giant SAP SE announced the launch of its blockchain-based supply chain tracking system that helps eliminate counterfeit drugs along the pharmaceutical supply chain. In a statement, the company noted that its blockchain-based solution helps customers comply with the U.S. Drug Supply Chain Security Act or DSCSA. Ford Motor Co. plans to launch an all-electric plugin version of its popular F-150 pickup truck. The announcement was made by Jim Farley, Ford's president of Global Markets, during a presentation at the Deutsche Bank Global Automotive Conference in Detroit. Ford's announcement comes as the auto industry transitions away from fossil fuel-powered transportation to electric vehicles. Logistics giant UPS' investment arm Strategic Enterprise fund made an equity investment in blockchain-for-business company Inxeption Corp. In a statement, Inxeption, an industrial-strength eCommerce platform built on Blockchain, said the investment will be used to create innovative new e-commerce solutions for B2B sellers and buyers.
Follow RTT