Home & Office

Ericsson to slash 1,550 jobs in Sweden

Job cuts to fall heaviest on network business following falling sales in the unit.
Written by Liam Tung, Contributing Writer

Swedish telecoms giant Ericsson will slash 1,550 roles, with the cuts falling heaviest on its struggling Networks unit. 

Ericsson HQ
Ericsson has announced job cuts of 1,550 in Sweden.

The job cuts, affecting all areas of Ericsson's businesses in Sweden, will amount to a reduction of about eight percent of its 17,700 strong workforce in its home country.

Around 1,000 jobs will go from its Stockholm operations, where the company employs approximately 10,800 staff. 

"It is naturally a difficult message for our employees in Sweden," Tomas Qvist, head of Ericsson's human resources in Sweden said in a statement.

"We must ensure that we can continue to execute on our strategy to maintain our market leadership, invest in R&D and meet our customers' needs. To secure this we need to focus on reducing cost, driving commercial excellence and operational effectiveness. This will enable us to secure our future competitiveness."

The bulk of the cuts will come from Ericsson's Swedish Networks unit, the largest part of the company by revenue, which suffered a 17-percent year-on-year fall in revenues in the third quarter, to 26.9 billion SEK ($4bn). Networks accounted for 58 percent of its revenues in the third quarter of 2011 but only 48 percent in Q3 this year. 

The company has attributed the decline in network sales to weaker performance in Europe, China, Korea and Russia and continued declines in CDMA equipment sales. 

The cuts will affect nine of Ericsson's 13 facilities across Sweden and will extend to consultants and its temporary workforce, which Ericsson expects to be "substantially reduced". The round of cuts it announced does not affect its wider global operations. The company employs 180,000 worldwide. 

Ericsson expects the global network business to grow at a compound annual rate of between three and five percent in the coming years, it said at its annual investor day in Stockholm on Tuesday. 

Ericsson's cuts follow an announcement by rival telecoms equipment maker Alcatel Lucent last week that it would slash 5,500 jobs worldwide, including 15 percent of its French workforce, in a bid to save $1.6bn. 

Editorial standards