The ailing firm said it would intensify its cost cutting measures, announcing 7,000 more redundancies to help it meet its goals.

In its eighth consecutive quarterly loss, Ericsson reported a loss of 4.3bn kronor ($516m) during the first three months of the year.

The firm now plans to reduce its workforce of 61,000 to 52,000 by the end of this year and then lose a further 5,000 jobs in 2004.

By the end of next year, Ericsson will have almost halved its workforce in a two year period through several rounds of job cuts.

Short-term challenges

"We are heading in the right direction but a lot more can be done to simplify our ways of working and further reduce costs," said chief executive Carl-Henric Svanberg.

Mr Svanberg blamed the firm's current troubles on an increasingly uncertain global economic outlook.

The firm said it now expected mobile systems sales to fall by more than 10% this year.

Many debt-laden telecoms operators are postponing spending on the next generation of mobile phones - known as 3G - in the current economic climate.

But Mr Svanberg insists that, despite near-term challenges, the longer-term market opportunities for 3G remain attractive.

Stock cheer

"The convenience of mobility and the benefits of 3G will continue to attract new customers and increase usage," he promised.

Analysts expressed enthusiasm for the latest round of cost-cutting and Ericsson's share price jumped 11% in morning trade on the back of he news.

"The company is making heavy restructuring which we find a positive and aggressive reaction, exactly what we were expecting from the new chief executive," said Jussi Uskola at Nordea Securities.

"The spotlight is on the restructuring figures.... these are necessary and good measures, there is no time to waste," said Thomas Langer, analyst at WestLB Panmure.