Ericsson Announces Reduction in Workforce

As many as 3,000 positions being reduced in production, R&D, and sales and administration
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STOCKHOLM—Ericsson is taking measures that it says is in line with its “ongoing cost and efficiency program,” reducing a total of 3,000 positions across the company’s Sweden locations. The reduction is affecting three areas: 1,000 positions are being reduced in production; 800 in research and development; and 1,200 in group and support functions.

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The proposed reductions are intended to be met by a combination of voluntary and forced reductions, according to Ericsson, as well as other potential alternatives like outsourcing. The reductions are expected at the following sites: Borås, Göteborg, Karlskrona, Kumla, Linköping and Stockholm. Ericsson says it also plans to make general cost reductions and take out external costs by general reductions in operating expenses and reducing the number of consultants by 900.

Jan Frykhammar, president and CEO of Ericsson, describes the reductions as “necessary to secure Ericsson’s long term competitiveness as well as technology and services leadership.”

The company also announced that it has plans recruit 1,000 engineers to its Sweden locations over the next three years, primarily from universities. Additional methods of reduction intended to be implemented by Ericsson include the consolidating of production to fewer global sites, and a reduction of cost in sales and administration in line with the new company structure that was introduced in July.

A majority of these moves are expected to be completed during the first quarter of 2017. The operations in Borås and Kumla are expected to conclude in the second quarter of 2017.