Update on cost and efficiency program

The intended reductions in Sweden announced on Oct 4, 2016 are progressing ahead of plan. Voluntary program finalized - no further forced workforce reduction currently planned in Sweden.

Total company restructuring cost for 2016 estimated to SEK 5.5-6.5 b., compared to previous estimate of SEK 4-5 b. due to faster implementation of the cost and efficiency program in Sweden. Restructuring costs for 2017 are expected to somewhat decrease, but will be communicated in conjunction with Ericsson Q4 result in January 2017.

On October 4, 2016, Ericsson (NASDAQ:ERIC) announced the intention to reduce 3,000 positions in Sweden as part of the companys ongoing global cost and efficiency program. The reduction was to be made through a combination of a voluntary reduction program, reduction of production in Sweden, outsourcing and natural attrition during 2016. The voluntary program in Sweden has been successfully completed and 1,600 employees will leave Ericsson through the program on December 31, 2016. Currently, no further forced staff reductions are planned in Sweden beyond what has already been announced relating to production sites.

This means that the reductions in Sweden are progressing ahead of plan, resulting in an increase in estimated restructuring costs for 2016 of SEK 5.5-6.5 b., compared to the previously communicated estimate of SEK 4-5 b. This assumes that all global reduction programs are executed according to plan. Restructuring charges for 2017 are expected to somewhat decrease as a consequence of faster implementation of the Swedish reduction activities. Estimated full year 2017 restructuring costs will be communicated in conjunction with Ericsson Q4 result in January 2017. Cash outlays for the voluntary program are expected 2017-2018.

The global cost and efficiency program is tracking towards the previously communicated target to:

reduce the annual run rate of operating expenses, excluding restructuring charges, to SEK 53 b. in the second half of 2017.

make cost of sales reductions visible in the gross margin in the second half of 2017, compared to full year 2016.

NOTES TO EDITORS

Press release October 4, 2016 Ericsson announces changes in operations in Sweden

For media kits, backgrounders and high-resolution photos, please visit www.ericsson.com/press

Ericsson is the driving force behind the Networked Society - a world leader in communications technology and services. Our long-term relationships with every major telecom operator in the world allow people, business and society to fulfill their potential and create a more sustainable future.

Our services, software and infrastructure - especially in mobility, broadband and the cloud - are enabling the telecom industry and other sectors to do better business, increase efficiency, improve the user experience and capture new opportunities.

With approximately 115,000 professionals and customers in 180 countries, we combine global scale with technology and services leadership. We support networks that connect more than 2.5 billion subscribers. Forty percent of the worlds mobile traffic is carried over Ericsson networks. And our investments in research and development ensure that our solutions - and our customers - stay in front.

Founded in 1876, Ericsson has its headquarters in Stockholm, Sweden. Net sales in 2015 were SEK 246.9 billion (USD 29.4 billion). Ericsson is listed on NASDAQ OMX stock exchange in Stockholm and the NASDAQ in New York.

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LINK:	http://www.ericsson.com/thecompany/press/releases/2016/12/2062901...
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