Ericsson says well on track to reach cost savings target by mid-2018

STOCKHOLM (Reuters) - Swedish mobile telecom gear maker Ericsson is on schedule to reach its target of making at least 10 billion crowns ($1.21 billion) of annual savings by mid-2018, its top chief said on Wednesday.

Ericsson has made sweeping cost cuts and replaced much of its top management to try to turn around a business hit by competition from China’s Huawei and Finland’s Nokia, falling spending by telecoms operators and the hangover from a failed plan to diversify from core activities.

“We will reach the 10 billion well on time,” Chief Executive Borje Ekholm told reporters ahead of the firm’s annual general meeting at a venue close to its north Stockholm headquarters.

The fourth quarter of last year was the firm’s fifth straight quarter of operating losses. It said in January that the cost-cutting program was saving around 6 billion crowns on an annual basis at that time.

($1 = 8.2887 Swedish crowns)

Reporting by Olof Swahnberg and Helena Soderpalm; Editing by Simon Johnson and Louise Heavens