Ericsson linked to 3,000 job cuts as part of Swedish closure - Mobile World Live

Ericsson linked to 3,000 job cuts as part of Swedish closure

22 SEP 2016

Equipment giant Ericsson plans to shut down the last of its Swedish manufacturing sites as part of a planned savings strategy, which could lead to 3,000 jobs being lost in the network products division, according to documents seen by Svenska Dagbladet.

The planned closures are expected to save about SEK3 billion ($350 million), the report said.

Manufacturing facilities in the cities of Boras and Kumla will reportedly be closed, ending 140 years of production in Sweden for the company.

However, Reuters quoted union representative Per Norlander as saying that no final decision had been made: “It’s absolutely not certain they will be closed”.

Savings target
In its Q2 2016 results, the company doubled the target of its previously announced opex reduction programme. The current plan is savings of SEK9 billion ($1 billion) during 2017.

In addition, Ericsson at the time said it will reduce R&D investment in IP as well as reap savings from its new corporate structure, announced in April.

These moves are expected to cut opex, excluding restructuring charges, to SEK53 billion in the second half of 2017, compared to SEK63 billion for full-year 2014. This equates to twice the previously announced savings.

“Will there be more job losses? This is the only way unfortunately to reduce cost so there will be reductions in our workforce and consultants,” CFO Jan Frykhammar (currently interim CEO) told Mobile World Live in an interview during the Q2 results in July and this week the firm confirmed to Reuters it would reduce staff worldwide.

About 4,000 staff left the company in the second quarter, although the reduction was offset by the addition of new staff following the acquisition of Polish software firm Ericpol. Last year, 13,000 left the company and about 10,000 joined.

Last week, Ericsson combined its strategy and technology functions, with current CTO Ulf Ewaldsson taking on the additional role of head of strategy.

The appointment came just weeks after CEO Hans Vestberg was ousted after seven years at the helm.

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Saleha Riaz

Saleha joined Mobile World Live in October 2014 as a reporter and works across all e-newsletters - creating content, writing blogs and reports as well as conducting feature interviews...More

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