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​Ericsson sheds 2,200 jobs in Sweden to deliver $1bn savings

Swedish telecoms vendor Ericsson will cut around five percent of its Swedish workforce in the largest job losses it's made in two years.
Written by Liam Tung, Contributing Writer

Ericsson is shedding over 2,000 jobs in Sweden as part of a shake-up of its R&D activities and an ongoing shift towards outsourcing manufacturing.

Employees in the company's home market of Sweden will bear the brunt of a cost-cutting program announced in November last year, which aims to bring in total savings of around SEK 9bn ($1bn) by 2017.

The company will axe 2,220 roles in Sweden, with half of the job losses to come from Stockholm, and the remainder spread across Katrineholm, Borås, Gothenburg, Kumla, Linköping, and Karlskrona. It's also shutting down its operations in Katrineholm and losing 850 consulting roles in Sweden.

The affected jobs are mostly in Ericsson's R&D and supply units, the company said on Wednesday. The cuts amount to about five percent of Ericsson's Swedish 19,000-person workforce last year.

The cost-cutting program announced last year is expected to cost between SEK 3bn and SEK 4bn in restructuring charges between 2015 and 2017. It also includes restructuring stemming from its exit of the modem business last year, which saw it lay off about 1,000 of the 1,500 employees within the unit.

Ericsson's last major jobs cull in Sweden involved 1,550 roles in 2012.

Despite a global shift towards 4G network deployments, in January Ericsson reported disappointing fourth-quarter earnings for its networks business, which accounts for 50 percent of its revenues. Factoring in currency changes, the unit saw a seven percent year on year decline, which Ericsson attributed to a slowdown in spending among US carriers on 4G equipment. Customers in the country have largely completed 4G deployments and are now focusing on boosting capacity.

The company, however, sees potential for growth in 4G investments in the Middle East, Europe, and Asia, while over the longer term 5G may bring the next boon in mobile telecommunications spending. Commercial deployments aren't expected until 2020.

Ericsson had 118,055 employees worldwide at the end of 2014, of which 25,700 work in R&D, according to its 2014 annual report.

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