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To: JGoren who wrote (19521)	12/10/1998 7:38:00 PM
From: Jon Koplik	Read Replies (1) \| Respond to of 152472

To all - WSJ's wrap-up on ERICY : December 10, 1998 Ericsson to Cut 10,000 Jobs As Global Slump Hurts Profits An INTERACTIVE JOURNAL News Roundup Swedish telecommunications-gear maker Telefon AB L.M. Ericsson warned Thursday that 1998 profit will be disappointing and said it will cut 10,000 jobs, or 10% of its work force, next year as the global financial crisis stifles sales. The news stunned investors. In Stockholm at midafternoon, Ericsson's shares were down 52 kroner, or 22%, at 185 kroner. The company's American depositary receipts were down $4.375, or 15%, to $24.50 in midday trading on the Nasdaq Stock Market. Ericsson of late has been plagued by a plunging stock price, virtually flat sales of mobile phones, and organizational problems. Meanwhile, its latest mobile-phone models have had technical problems. The company said that although it has seen recovery in some Asian markets, the global financial slowdown has cut demands for its products, especially in its public networks business. Ericsson also said its mobile phone operations have been hurt by a shift in product availability. Ericsson ranks third in the U.S. market for mobile phones, and second in European markets, according to market research. It has been locked in a competitive struggle with Finnish rival Nokia Oy and U.S. counterpart Motorola Inc. Shares of Motorola and Nokia also fell Thursday, hurt by the possibility that the problems Ericsson faces may spread across the industry. Motorola's shares were down 50 cents to $59.5625 on the New York Stock Exchange, while Nokia's ADRs were off $1.875 to $106.4375, also on the Big Board. In a statement Thursday, Ericsson said that full-year profit and sales will be "somewhat below expectations." Analysts surveyed by First Call expected the company to earn 87 cents per share in 1998 and $1.05 per share next year. In 1997, the company earned $1.49 billion, or 81 cents a share, on revenue of $21.03 billion. Ericsson also warned that when it issues its next financial report on Jan. 28, it will include the heavy job cuts, which represent about 10% of the company's work force of more than 100,000. It wasn't immediately known where those jobs would be cut, but the company has operations in 140 countries. Operating income, specifically in Ericsson's mobile phones business, was hurt by a shift in demand toward entry-level phones with reduced margins. Ericsson expects development for the next year to be below the company's long-term growth objectives, but the company hasn't changed its long-term goal of exceeding market growth. Ericsson said that although there are signs of recovery in some Asian markets, the wider repercussions on global demand are now affecting sales and income. Copyright © 1998 Dow Jones & Company, Inc. All Rights Reserved.

To: JGoren who wrote (19521)	12/10/1998 7:40:00 PM
From: Clarksterh	Read Replies (2) \| Respond to of 152472

JG - Ericy's chip rate proposal was intended to play in the area of general public opinion, i.e., PR, rather than in the ITU or knowledgeable industry persons as a substantive and meaningful proposal to compromise. Nothing like sounding like an old record, but I never said it was intended to be a serious proposal. In fact I said exactly the opposite. I just said that it was probably primarily driven by the fact that from a technical standpoint they have no real choice but to change the chip rate. And if they have to do that, why not cover your 'oops' in the blanket of 'compromise' and good will. Nothing like making lemonade of lemons, especially when you are Ericsson and are awash in lemons. (How do you like their attempt to make lemonade of their complete failure overall - 'its asia, not us'.) Clark PS It shouldn't be surprising that you see in the Ericsson 'compromise' a hint of their legal situation and I see a hint of their technical situation. We're just showing our stripes. The only comment I can make is that they will almost certainly have to change their chip rate regardless of legal matters. As to what is really the proximate cause of the 'compromise', who really knows?