Ericsson, one of the world’s largest telecoms companies, this morning posted a 70 per cent fall in second-quarter profits, hit by the cost of cutting jobs and lower demand for mobile handsets at its joint venture with Sony.

Net income for the Stockholm-based company fell to 1.9 billion crowns (£160 million), down from 6.4 billion crowns for the three months to June 3.

The company, which is the world’s biggest maker of wireless networks, said it continues to plan for flat development of the mobile infrastructure market in 2008, while it expects growth from the professional services market.

The company has struggled as spending on networks has declined and its Sony Ericsson mobile business loses ground to rival Nokia. Last week Sony Ericsson announced it would cut 2,000 jobs.

Ericsson’s shares have slumped since October last year when it issued a profits warning and cuts its outlook for the year. In February the company launched a cost-cutting plan that would lead to thousands of job cuts worldwide.

During the second quarter, restructuring charges to cover changes to product and supply chains and layoffs reached 1.8 billion crowns.

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