Wireless equipment maker LM Ericsson AB reported a sharp drop in fourth-quarter net profits and said Friday it would lay off around 1,000 employees in Sweden because of cost cuts.

At a news conference later Friday, Ericsson’s CEO Carl-Henric Svanberg said job cuts would also be planned worldwide to reach its annual cost cut goal of 4 billion kronor [US$629 million].

“Totally in the world… as a rule of thumb, I’m sure that a thousand [people] per billion [kronor] is probably in the neighborhood of where it’s going to end up,” Svanberg said, adding that such a head count would include consultants, suppliers and temporary workers. The company later declined to clarify his comments further.

All parts of Ericsson’s business would be affected by the savings, Svanberg said.

“What we’re doing is to adjust to a slower market,” Svanberg said. “We’re taking action to safeguard our competitive position.”

One-time costs are expected to reach around 4 billion kronor (US$629 million), but will be taken “as each activity is decided.”

The full effect of the cost cutting is expected in 2009, the company said, and most of the layoffs in Sweden would be made through voluntary programs “as far as possible.”

“Sometimes voluntary doesn’t work,” Svanberg said, “but that’s how we want to approach it.”

The company also said that although industry fundamentals and consumer behavior back a positive longer-term outlook, “we find it prudent to plan for a flattish mobile infrastructure market” in 2008 on the back of slowing market growth in the past year.

Operating margin for the quarter fell to 14 percent, from a previous 22.5 percent in the same three months in 2006.

The company blamed it mainly on tougher times in its networks business, where rapid build-outs of lower margin projects in emerging markets is pressuring profitability.

A fall in network expansions and upgrades in its mature…