Ericsson was tipped to close a major research centre in China following a loss of market share in the mainland, and a negative outlook due to ongoing friction between China and Sweden.

South China Morning Post reported Ericsson will shut its R&D centre in Nanjing, one of five research centres in China, and transfer 630 employees to Finnish software provider TietoEVRY, which agreed to hire the staff.

The newspaper stated Ericsson will continue to operate its 5G plant in Nanjing.

It had about 50,000 staff in China at its peak.

The closure comes about a month after Ericsson was reportedly awarded about a 3 per cent share of a joint China Unicom and China Telecom RAN contract, having previously won around a 10 per cent share of the operators’ standalone 5G network project.

In addition to the lower share, Ericsson reported reduced revenue from China in Q2, earlier warning sales could be impacted by Huawei being shut out of supplying 5G equipment in Sweden.

Last month, Ericsson EVP of business area Networks Fredrik Jejdling told Mobile World Live it would be “prudent to assume we’re going to get a lower market share in mainland China”.