Telecommunications vendor Ericsson confirmed on Tuesday it intends to cut 3,000 jobs in Sweden, plans to recruit 1,000 in research and development
Ericsson intends to cut 3,000 jobs in Sweden, the company announced on Tuesday morning. The telecommunications vendor employs approximately 16,000 people in its home country. The cuts are in line with the cost and efficiency program targeting savings of 9 billion kronor ($1.04 billion) during 2017 and additional restructuring measures presented in July.
“The positions we intend to reduce are in production, research and development, and sales and administration in our units across our sites in Borås, Göteborg, Karlskrona, Kumla, Linköping and Stockholm,” a company representative told RCR Wireless News. The proposed reductions will be met through a combination of voluntary and forced reductions, and outsourcing.
As previously reported, Ericsson will significantly reduce its production in Sweden, cutting a total of 1,000 jobs in Borås and Kumla, its two remaining production facilities in the country. The goal is to consolidate production to fewer sites globally, in particular in Estonia and China. Speaking at a press conference, Jan Frykhammar, president and CEO of Ericsson, said some production functions for prototyping, closely linked to “5G” R&D, will remain. As for the 800 job cuts in R&D and approximately 1,200 in other operations, Ericsson would not comment on which business divisions will be affected. “We have ongoing discussions with the unions and can only give high-level information,” said the representative. In addition to the 3,000 job cuts, Ericsson plans to reduce the number of consultants in Sweden by 900.
“Ericsson is going through a large transformation. We continue to have a strong focus on R&D, and [for] many years, most Ericsson employees work in software development and services rather than hardware production. The measures are necessary to secure Ericsson’s long-term competitiveness as well as technology and services leadership,” said Frykhammar, in a statement.
Strengthening Sweden’s position in R&D
Ericsson hopes the change in operations and adjustment of competence will help the company “meet technology shifts, new customer groups and a continued increased proportion of software development”. As part of this shift, Ericsson announced it plans to recruit 1,000 people in R&D – mostly from universities –in the coming three years. Ericsson did not specify which particular new skills the company will be looking for. Sweden is today the base for Ericsson’s R&D efforts in radio technology and 5G.
“We have a clear goal that our R&D in Sweden should be world-leading, not least in next-generation systems. In the short term we have to reduce the number of positions in R&D, primarily within administrative roles. At the same time our intention is to bring in new competence in new technologies. Therefore, we intend to recruit approximately 1,000 engineers in Sweden, primarily from universities, over the coming three years,” said Ulf Ewaldsson, Ericsson’s chief strategy and technology officer, in a statement.
Ericsson expects the process to be concluded during the first quarter of 2017, while the process specifically related to operations in Borås and Kumla is expected to be concluded during the second half of 2017. Total restructuring charges for 2016 are estimated at 4 billion to 5 billion kronor.
