Ericsson plans to cut 3000 jobs in Sweden
Tue 4 Oct 2016
Swedish telecoms giant Ericsson has announced a huge restructuring across its home country operations, cutting over 3,000 jobs in a move to bolster its ‘long-term’ competitiveness.
In a press release today, Ericsson said it is planning to lay off around 1,000 positions in production, 800 in research and development (R&D), and 1,200 in other units including sales and administration. The reduction could total as much as a fifth of its 16,000-strong Swedish workforce.
The firm also added that it would be lowering the number of consultants it uses in Sweden by up to 900.
The proposed adjustments, which will be met through a mix of both voluntary and forced reductions, will mainly impact operations in the factory towns of Borås and Kumla, as well as in Gothenburg, Karlskrona, Linköping and Stockholm.
The company hopes that the cut will help to reduce costs as it attempts to battle a slowing mobile hardware market. As investment in wireless equipment from phone carriers across Europe, Russia and Brazil winds back, Ericsson sales in the second quarter of this year fell by 11%. In this increasingly tough market, Ericsson is looking to reinforce its position against competition from the likes of Nokia and Huawei.
In its push for dominance, Ericsson is placing its bets on the development of 5G networks, as well as other emerging software-based services, such as IoT and cloud technologies. The company announced in today’s release that it will be launching initiatives to encourage development in these areas, involving universities and research institutions.
‘Ericsson is going through a large transformation,’ commented Ericsson President and CEO, Jan Frykhammar. ‘We continue to have a strong focus on R&D, and for many years, most Ericsson employees have worked in software development and services, rather than hardware production. The measures are necessary to secure Ericsson’s long-term competitiveness as well as technology and services leadership,’ he continued.
In July, Frykhammar took the top position as a temporary replacement, following the ousting of former CEO Hans Vestberg. Since the takeover, Frykhammar has aimed to significantly cut costs, continuing the company’s goal of saving 9 billion kronor (approx. £820 million) each year by 2017.