Ericsson denied a downturn in business prompted a decision to close a research facility in China, explaining in a statement the move was instead related to reprioritising its global business with a focus on 5G and cloud RAN technologies.
The vendor told Mobile World Live it is reducing investment in legacy technology development including 2G, 3G and 4G and confirmed staff affected by the closure of the site in Nanjing would be offered jobs with Finnish software provider TietoEVRY, a longstanding Ericsson partner.
“We would like to clarify this divestment is not related to our recent loss of market share in mainland China”, which Ericsson stated had been “and remains a very important market for us”.
“The market and customers’ needs are constantly changing, and so is Ericsson”, it added, explaining it plans to optimise global R&D to improve efficiency.
South China Morning Post reported Ericsson’s plan last week, stating 630 staff would be offered roles with TietoEVRY.
Ericsson stated the shift would be effective from 1 November and it will work closely with the software company to ensure “a successful, smooth transition”.
“All other activities, including manufacturing, in Nanjing will remain, and are not affected by this change.”