Ericsson said today that 2,200 jobs in Sweden are subject to notice. The Swedish wireless equipment giant currently employs roughly 115,000 professionals worldwide, with 17,580 employees in Sweden. Today’s announcement means that one of every eight Ericsson jobs in Sweden is subject to being cut.
The company said most of the cuts will come in the areas of supply, and research and development. At the end of 2013, Ericsson had 25,300 R&D employees, but the company’s R&D priorities are shifting as it focuses more on network software and media. Ericsson shed its chip and mobile device businesses several years ago, meaning that its hardware research needs have changed significantly over the years.
Ericsson is in the process of establishing three global information and communication technology centers worldwide, two of which are in Sweden and one of which is in Montreal, Canada. Ericsson is working to develop a common test and development strategy and methodology for R&D at each of these centers, as part of a series of efficiency initiatives announced late last year.
In addition to reducing headcount, Ericsson said it wants to drive efficiency by cutting external costs. Activities in 2015 will mainly target structural improvements in R&D, service delivery and supply. The company said its programs to cut costs and improve efficiencies will continue through 2017.
Ericsson is cutting costs in order to fund growth in its targeted areas: IP networks, cloud, TVÂ and media, OSSÂ and BSS, and “industry and society.” The company expects to generate roughly $1 billion in savings by 2017. In the interim, the company projects annual restructuring charges of approximately $230 million per year. In addition, Ericsson projects more than $400 million in supplemental restructuring charges through 2017.
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