Ericsson (ERIC - Get Report) said Tuesday that it will take a much larger-than-expected restructuring hit as it seeks to steady its finances and realign its business model under new CEO Borje Ekholm.

The telecoms equipment maker will take a writedown of between SEK6 billion and SEK8 billion ($680 million to $910 million) in its current fiscal year, around SEK2 billion of which will hit the current quarter and reduce operating income by as much as SEK4 billion, the company said. A further SEK7 billion to SEK9 billion in provisions will be taken in the first quarter, Ericsson said, " triggered by recent negative developments related to certain large customer projects."

"For some time Ericsson has been challenged on both technology and market leadership and the group strategy has not yielded expected returns," said Ekholm in a statement. "In our strategy review we have listened carefully to customers around the world and made an in-depth analysis of our portfolio and performance."

The group plans to reallocate resources and focus into three core areas -- networks, digital services and the Internet of Things -- and look at strategic opportunities in media and cloud infrastructure hardware.

Earlier this year, Ericsson had told investors that its efforts to curb costs and boost efficiency progressed at a faster pace than expected in the final quarter of 2016 and that this should result in lower restructuring charges in 2017.

Its networks business saw sales fall 13% year-on-year but nonetheless expand 39% on a quarterly basis partly thanks to transition from 3G to 4G in the Asia Pacific region, as well as the depreciation of the Swedish Krona against the U.S. dollar. However, the business remained weak in North America and Europe.

Globally, telecom equipment makers are suffering as their customers invest less in 4G services, and even less in 3G, as they wait for the introduction of 5G networks.

Ericsson shares were marked 0.55% lower at closed at SEK58.74 each by 11:00 CET in Stockholm Tuesday and have risen around 8.7% over the past three months compared to a 3.26% gain for the Stoxx Europe 600 Telecommunications index.