Ericsson is to cut 3,000 out of its 16,000 Swedish workforce, as well as make cost savings that will shed 900 consultants in its home market.
The move is hardly a surprise given recent reports and comments made to Mobile World Live in July by Jan Frykhammar, who has assumed the CEO post while a full-time replacement is sought, a process that is reportedly nearing fruition.
The cuts are split between 1,000 in production, approximately 800 in R&D and 1,200 in other operations, including sales & administration. In addition to the 3,000 employees, the company said 900 consultants are leaving too.
The job reductions will be made via voluntary and compulsory redundancies, as well as outsourcing.
More optimistically, with an eye on the future, Ericsson will recruit 1,000 employees in Sweden over the next three years, mainly from universities.
However, referring to the jobs cull, stand-in chief Frykhammar commented: “The measures are necessary to secure Ericsson’s long term competitiveness as well as technology and services leadership.”
New CEO nears
Dagens Industri reported that the appointment of a full-time CEO is close and named two leading candidates. One is Hakan Eriksson, head of Ericsson Australia, and the other is Karl-Henrik Sundstrom, CEO at Stora Enso.
Cost-cutting now will give the new appointee more room for manoeuvre rather than burden him or her with the task of restructuring.
The company plans cuts at the following sites in Sweden: Boras, Goteborg, Karlskrona, Kumla, Linkoping and Stockholm. In particular, the company said, “significant reductions in operations” are planned for Boras and Kumla, as it consolidates to fewer manfucturing sites and works more with partners.
A previous report said today’s cuts would involve closing those two manufacturing facilities, so ending domestic manufacturing.
The company is in talks with unions, which are expected to conclude for the majority of operations during the first quarter of 2017. The process related to the operations in Boras and Kumla is due to be concluded during the second half of 2017.