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Kit maker to make ‘significant reductions’ at Bors, Kumla plants; 900 external consultants to go.
Ericsson confirmed on Tuesday that it will cut 3,000 jobs in Sweden, with its manufacturing plants in Borås and Kumla bearing the brunt of the redundancies.
The kit maker said 1,000 production jobs will go; 1,200 operations positions will be cut; and its research and development division will shed 800 jobs. Ericsson said it will also reduce the number of external consultants working for it by 900.
"The measures are necessary to secure Ericsson’s long term competitiveness as well as technology and services leadership," said Ericsson CEO Jan Frykhammar, in a statement.
Ericsson said the job cuts will be made at its sites in Borås, Gothenburg, Karlskrona, Kumla, Linköping and Stockholm, with the majority of redundancies effecting Borås and Kumla, the company’s last remaining manufacturing plants in Sweden.
The announcement follows a report by Svenska Dagbladet (SvD) in September which claimed that the aforementioned plants will close altogether.
"Ericsson intends to make significant reductions in operations in Borås and Kumla, in line with the company production strategy, consolidating to fewer production sites and continued work with partners," said Ericsson in an email to Total Telecom.
Ericsson expects to complete the majority of the redundancy programme during the first quarter of 2017. Winding up the operations in Borås and Kumla is expected to be completed in the second half of 2017.
The redundancies are part of the company’s cost-reduction programme.
In 2014, Ericsson announced plans to cut annual costs by 9 billion kronor (€949.5 million) by 2017, with half of those savings being generated by a reduction in operating expenses. However, on 19 July this year, Ericsson doubled its operating savings target, and a week later, Ericsson CEO Hans Vestberg resigned.
Despite the cuts, Ericsson on Tuesday reiterated its commitment to R&D, announcing plans to recruit 1,000 engineers in Sweden over the next three years.
"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," said Ulf Ewaldsson, Ericsson’s chief strategy and technology officer.
