Ericsson announced on Wednesday that it will cut 2,200 jobs mainly at its Swedish R&D and supply divisions.
The kit maker will also make cuts at its sales, general and administration operations; it will also reduce the number of external consultants on its books and consolidate its IT portfolio.
The decision forms part of the company’s drive to save 9 billion kronor (€986.8 million) by 2017. Ericsson originally revealed in November that redundancies were in the offing, but did not say how many. The cost-cutting drive will add SEK3 billion-SEK4 billion in annual restructuring costs for the programme’s duration.
"This is a long-term initiative with an ambition to reduce operating expenses and cost of sales across all Ericsson’s operations, units and functions already in 2015 in order to fund growth in targeted growth areas," said Ericsson, in a statement.
These areas include IP networks, cloud, TV and media, OSS and BSS, as well as industry and society, which covers areas like the Internet of Things (IoT) and smart cities.
Between 2013 and 2017, Ericsson expects the network equipment market to show a compound annual growth rate (CAGR) of 2%-4%. Over the same period, the company estimates services will show a CAGR of 4%-6%, while support solutions will grow at 7%-9%.
