STOCKHOLM (Reuters) -- Telecom equipment maker Ericsson (ERICb.ST) reported lower-than-expected profit and announced sweeping job cuts on Friday as the group hunkered down for what it expects will be a flat market this year. The world's biggest mobile network maker said it was planning for ""flattish"" development in the mobile infrastructure market in 2008.

The company plan to chop about 4 billion Swedish crowns ($630.3 million) per year from costs, with the full effect coming in 2009.
Ericsson said in a statement it would cut about 1,000 jobs in Sweden. Chief Executive Carl-Henric Svanberg, speaking with Swedish agency TT, said some 4,000 jobs would go globally.
Operating profit slid to 7.6 billion Swedish crowns ($1.2 billion) in the fourth quarter from 12.2 billion a year earlier. Forecasts in a Reuters poll were for a 7.94 billion crown profit.
The company said it had a 14 percent operating margin, below forecasts for 14.7 percent.
Analysts said a downbeat report from Ericsson had been expected, but they zeroed in on one particular area where Ericsson looked soft -- the company's multimedia division.
""In the P&L there's one weak spot and that's the multimedia division with much bigger losses than the consensus was looking for,"" said Thomas Langer, analyst at WestLB. ""Everybody was looking for a small operating profit.""
Long-term growth
Multimedia, a division created as part of a reorganization designed to ensure future long-term growth, lost 439 million crowns in the quarter versus a year-earlier profit of 527 million.
Multimedia sales totaled 4.9 billion crowns, compared with an average forecast for 5.12 billion in a Reuters survey.
""That's the only thing that somewhat spoiled the P&L. All the core businesses performed in line and maybe networks was a bit better than expected, especially on the top line. On the positive side I would highlight the operating cash flow which was much stronger than we expected,"" said WestLB's Langer.
Overall, sales of 54.5 million crowns were slightly better than forecasts of 53.8 billion. Ericsson had announced in October it expected sales in a 53 billion to 60 billion range, but later said it expected them to come in at the lower end of that range.
Ericsson said it aimed to increase market share and the long-term fundamentals were positive. But, with expectations for a flat market in its main business area, it was cutting costs.
""The market growth, however, slowed during last year and for 2008 we find it prudent to plan for a flattish mobile infrastructure market. We will ... reduce our cost base to safeguard our competitive position,"" Svanberg said.
Greger Johansson, analyst at Redeye, said a cost cutting plan had been expected by the market. ""I had expected it to be slightly bigger. The other important issue is that they've cut their global outlook to no growth at all,"" he said.