“It’s naturally been bewildering for everyone and been more difficult and deeper than anyone could have believed,” Svanberg is reported as saying by the Dagens Industri newspaper.
The comments came at a leadership seminar arranged by the magazine Chef (‘Boss’) on Thursday during which the head of the telecoms giant faced questions about the current state of the markets and what it might mean for Ericsson.
Despite his concerns, Svanberg steered clear of predicting any doomsday scenarios.
“It looks really brutal out there right now, but it’s clear that we’re going to get through this,” he said.
“It’s obvious that the whole of society is affected right now in different ways, but it’s not the end of the world, but a correction.”
However, Svanberg admitted that the correction which was meant to “clean out all of the idiocy that shouldn’t be there” has become “quite frightening” due to the domino effects created by the financial industry’s ever more complicated and interrelated methods.
He was also confounded by a stock market characterized by investors who feel forced to sell, yet no one seems to want to buy.
“It’s strange behaviour,” he said.
“I believe we are all witnesses to something which doesn’t hold water. You can draw conclusions and reflect. There is some sort of dramatic drop in confidence in financial markets and stocks, and people who are selling out of necessity. I don’t think you can draw any major conclusions yet.”
Svanberg was reluctant to project exactly how the current financial crisis might affect different industries or Ericsson in particular, but he hinted that there is reason for hope when it comes to the future of the telecommunications industry.
“As we’ve stated several times, [telecoms] operators are financially strong – they have money, which wasn’t the case eight years ago,” he explained, referring to the 2000 telecoms crash which hit Ericsson especially hard.
The company laid off thousands of employees and ultimately had to spin off its handset division in a joint venture with Sony.
But Svanberg cautioned that the effects of the crisis have yet to play themselves out.
“There are fundamentally better conditions [in the telecoms sector], but we’ll have to wait and see how the financial crisis ends up affecting consumers,” he said.