Swedish telecoms group Ericsson has announced plans to axe up to 12,000 jobs worldwide, in a move which will cause worries for the firm's 2,500 staff in the Republic. The company has a workforce of around 100,000.

Ericsson, which has been hit by the slowing telecoms market, said yesterday it was too early to say how the job cuts would affect its operations in Dublin and Athlone. A spokesman said the company would break down the cuts in different countries and they would be implemented this year.

IDA Ireland executives met Ericsson officials on Thursday and yesterday to discuss the company's losses but a spokesman said it could be two months before the impact of the restructuring was known.

The Irish operations are already subject to a recruitment freeze announced last month and there is continuing uncertainty over a #224 million (£176.4 million) expansion plan for Cork which was announced last October.

The rationalisation plans were outlined yesterday as the mobile handset maker unveiled disappointing trading figures - in sharp contrast to Nokia which revealed a healthy rise in profits.

Ericsson, which is the third largest supplier of mobile handsets, said it was aiming to cut costs by £1.4 billion a year.

Details of the cuts came as Ericsson issued a first-quarter trading statement showing sales for the three months to March down 5 per cent to 55.9 billion krona (£3.8 billion sterling), while income before tax fell 90 per cent to 606 million krona.

Breaking the bad news, Ericsson's chief executive Mr Kurt Hellstrom said: "A general economic downturn and an abruptly slower telecom sector are affecting our customers as well as us."

He added that many telecoms operators were postponing their investments, which was hitting Ericsson's sales.

Ericsson's woes have been reflected across the telecoms equipment sector, and the job cuts follow similar announcements by rivals Motorola, Siemens and Marconi.

The Swedish group's figures were in stark contrast to data from Finnish rival Nokia, which showed profits for its first quarter rose 10 per cent.

The leading maker of mobile phones said first quarter figures exceeded estimates, with good profitability and an increase in market share in both handsets and networks.

Nokia's figures showed sales rose 22 per cent to #8 billion (£6.3 billion), while pre-tax profits rose 10 per cent to #1.5 billion.