Ericsson chops 300 A/NZ workers

Ericsson chops 300 A/NZ workers

Summary: Ericsson Australia and New Zealand has announced today that it intends to slash the number of its contractors in half and reduce its permanent workforce by around 100 over the next six months.


Ericsson Australia and New Zealand has announced today that it intends to slash the number of its contractors in half and reduce its permanent workforce by around 100 over the next six months.

(Credit: Ericsson)

The 200 contractors and 100 permanent employees will be losing their jobs due to projects nearing completion and a "global cost adjustment program" flagged by the global group in February which aimed to cut costs by around US$588 million globally.

Around 1660 permanent employees currently work at Ericsson in Australia and New Zealand. The company also hires the services of around 405 people in a contracting capacity.

On the Australian job losses Ericsson's director of HR Tristram Gray, said, "While it is always difficult to make these kinds of decisions, we are making every effort to support our employees at this time. In line with our strategy, we will continue to invest in developing our people to address future business opportunities."

The employees will receive their "above market" full entitlements, according to the company, and will also be offered outplacement, financial planning and counseling services support.

The move follows years in which Ericsson seemed to be enjoying success, having been chosen to build Telstra's billion dollar Next G network, although the carrier admitted the contract had pushed it to the limit.

The company is behind with the filing of its local results to the Australian Securities and Investments Commission, with the latest numbers available for the year to 31 December 2006. For that year, Ericsson Australia raked in $1.41 billion in revenue, a 153 per cent increase over the $557.72 million booked the previous year. Most of the increase was considered to have come from the Telstra contract.

However, despite the increase in revenue, Ericsson Australia's overall net profit after tax declined due to increases in expenses such as raw material costs, dropping 38.2 per cent to $17.61 million.

More recently Ericsson was chosen to upgrade Vodafone's network, although it recently copped flak for not meeting time constraints.

Just last month Ericsson gear was selected to light up Basslink, the long idle cable linking Tasmania to the mainland.

Dollars which could be around the corner include those for supplying services and components for the government's $4.7 billion National Broadband Network. Analyst firm Ovum's research director David Kennedy said in October he considered the strongest contenders for the lion's share of the work to include Alcatel Lucent, Ericsson and Huawei.

Topics: IT Employment, Mobility, Networking

Suzanne Tindal

About Suzanne Tindal

Suzanne Tindal cut her teeth at as the site's telecommunications reporter, a role that saw her break some of the biggest stories associated with the National Broadband Network process. She then turned her attention to all matters in government and corporate ICT circles. Now she's taking on the whole gamut as news editor for the site.

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  • Mistruths

    Ericsson employees have been offered nothing but meaningless spin.

    According to this
    David Terry won't have anyone else's job to take over in Ericsson. At least Telstra can pass his $1,000 a day fee back to its customers in the form of reduced bills.
  • Ericsson contractors cut

    I can confirm that most of the Ericsson java contractors from my team (Tazman and CST) had their contracts terminated with only 2 weeks notice, inculding myself.
    Thank you Ericsson!
    Nice present for Christmas!
  • Not A Decent Employer

    In the past, Ericsson have sacked permanent employees during slow times and then hired them back when things picked up.
  • Managers on a mission to line their own pockets.

    Corrupt Ericsson managers were obviously working on behalf of Telstra's Mr Trojillo.

    The giveaway was that these managers readily created conflicts to mask their own collusion. Proof of which can be readily found in what little was achieved for the large amount of monetary resources that were squandered at Telstras behest.

    It all came out in the wash in the end - Telstra missed out on an opportunity to do something worthwhile for the country. And these mealymouthed managers left behind a train wreck.
  • Standard practice

    No worries mate, guys with your expertise will find a job in no time. I got retrenched myself last year in October and it only took 2 weeks to get another job. You guys have like 3 months before Xmas - Plenty of time.

    2 weeks notice is the norm these days... everyone's expendable in IT.
  • Ericsson Management corrupt

    These guys are out there to only line their pockets and not look after the staff. They do not look after their resources and expect to achieve results. Some permanent staff have invested so much of their time for Ericsson in bad times so that the company could survive and now these same executives turn their back on their loyal staff