Union urges Ericsson to 'hold its nerve'

Ericsson has been told to "hold its nerve" by union officials aghast at the firm's decision to cut as many as 11,500 jobs following disappointing financial reports.

The Swedish mobile phone giant reported today that in addition to the 3300 cuts reported in March, it planned more losses, bringing the total to up to 11,500 jobs. More than half of the cuts will be made outside Sweden.

Bob Shannon, national officer at the Amalgamated Engineering and Electrical Union (AEEU), said the union planned to meet with the company today to see how the firm's 2000+ UK staff would be affected.

In March, Ericsson said it would lay off 1200 staff in the UK, with production plants in Nottinghamshire, Scunthorpe and Lincolnshire taking the brunt of the cuts.

Shannon said: "We have made it clear to Ericsson that it cannot keep cutting jobs in this country. It is essential that the firm holds its nerve in the face of the current problems."

Ericsson said the job losses, to be made by the end of the year, would mean fewer offices and fewer research & development centres in Europe. The firm is targeting the 15,000 contractors and consultants it uses, axing more than half in some areas.

Kurt Hellstrom, president and chief executive, said the move was necessary to streamline operations and reduce costs.

"A weaker market has contributed to the further deterioration of our mobile phone business. As a result, we are limiting the scope of our phone operations to the essential parts that also support our systems business. This will give us a business that is smaller, more manageable and has lower risk."

Ericsson's mobile phone division saw sales fall by 52 per cent, and overall sales drop by eight per cent. Pre-tax profits fell from £419m in the first three months of 2000 to £41m for the three months to the end of March 2001.