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Ericsson axes 1,500 jobs

07 Nov 2012
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Telecoms equipment maker Ericsson has cut nearly 10 percent of its Swedish workforce, with around 1,500 jobs to go.

The job cuts will affect employees in every one of the company's Swedish divisions. Ericsson head of human relations in Sweden, Tomas Qvist, said the layoffs were made to promote Ericsson's future competitiveness in the market.

"It is naturally a difficult message for our employees in Sweden. [But] we must ensure that we can continue to execute on our strategy to maintain our market leadership, invest in R&D and meet our customers' needs. To secure this we need to focus on reducing cost, driving commercial excellence and operational effectiveness," said Qvist.

"This will enable us to secure our future competitiveness. Over the past couple of years we have been continuously driving these global efficiency measures across regions and units. And, sometimes redundancies are unfortunately inevitable."

Ericsson has continued to struggle over the past few years. Last month, the firm was dropped by O2 following repeated outages blamed on Ericsson networking kit. Sony also recently ended its mobile phone partnership with Ericsson through a buyout.

According to principal analyst at Pund-IT Charles King, Ericsson's recent woes have to do with an increase in competition and the struggling European economy.

"I believe Ericsson is facing two significant problems: One is increasing competition in its core telecom infrastructure business; and the other is continuing weakness in the global economy that is impacting numerous companies in Europe," King told V3.

"The first issue is something Ericsson seems well positioned to address, and the company is in the process of a reorganisation that's designed to help it become more effectively competitive both in Europe and abroad. The second point is more problematic and, is frankly, beyond the abilities of any one company to change."

In related news, Ericsson's former partner Sony also cut 1,000 mobile jobs from its Swedish operations earlier this year.

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James Dohnert
About

James is a freelance writer and editor. In addition to ClickZ, his work has appeared in publications like V3, The Commonwealth Club, CachedTech.com, and Shonen Jump magazine. He studied Journalism at Weber State University.

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