Due to a slump in the handset sales and anticipating telecommunications companies to undertake spending cuts, wireless equipment maker LM Ericsson announced its plan of slashing 5,000 more jobs as a part of its cost reduction strategy.

Ericsson posted its net profit for its fourth quarter at 3.9 billion kronor, which marked a 31 percent fall from last year same quarter's 5.6 billion kronor. The reasons have been cited as restructuring charges, accompanied by "a dramatic drop" to the company's contribution from its handset unit, Sony Ericsson. The unit, Ericsson's venture with Sony, is expected to remain a loss-making unit for the first half of 2009.

The practical measures to be undertaken by the company in the wake of the grim economic scenario include its move to shift some of its operations to low-cost countries, as well as reducing the number of temporary workers and consultants. These measures will cost 6-7 billion kronor billion kronor, thereby leading to annual savings of 10 billion kronor by the second half of 2010.

At a press meet in Stockholm, CEO Carl-Henric Svanberg said that the moves announced by the company were a part of widening its savings program, as the global financial crisis continues to pressurize the industry.

Svanberg added: "To date, our infrastructure business is hardly impacted at all, but it would be unreasonable to think that this would be the case also throughout 2009. We will prepare for tougher times to defend our margins."