The company will focus on ‘simplifying and stabilising’ its business support Systems business unit, in 2019
Swedish tech manufacturer Ericsson will take $687 million hit as it looks to reshape its Business Support Systems (BSS) unit, according to a company release.
Ericsson’s was in the process of trying to scale up its BSS unit, which provides billing services to enterprise customers. However, the company said that a lack of appetite for the products had led the company to return to focussing on its core products.
"The anticipated customer demand for a full-stack pre-integrated BSS solution has not materialized. Delays in product and feature development has also made the full-stack Revenue Manager less competitive. R&D resources in BSS have been focused on full-stack Revenue Manager, causing further delays in product releases of the established platform. In addition, certain complex transformation projects experienced delays and cost overruns," Ericsson said in a statement to the press.
Ericsson said that it would book the $687 million loss in its fourth quarter 2018 financial reporting.
The decision will be a major source of irritation to the company’s shareholders, who had seen the company’s cost saving initiatives begin to bear fruit in recent months. Ericsson’s share price took a 4.5 per cent hit on Thursday, as the market reacted to the news.