Ericsson said Tuesday it will cut 3,000 jobs in Sweden and will downsize operations at several plants as part of its global plan to cut costs by 9 billion kronor ($1 billion) in 2017.
Jan Frykhammar, President and CEO, Ericsson said: "Ericsson is going through a large transformation. We continue to have a strong focus on R&D, and since many years, most Ericsson employees work in software development and services, rather than hardware production. The measures are necessary to secure Ericsson's long term competitiveness as well as technology and services leadership."
Ericsson today has approximately 16,000 employees in Sweden. The proposed reduction affects approximately 3,000 positions, of which approximately 1,000 positions in production, approximately 800 in R&D and approximately 1,200 in other operations.
The proposed reductions will impact operations on the following sites in Sweden: Borås, Göteborg, Karlskrona, Kumla, Linköping and Stockholm. Ericsson intends to make significant reductions of operations in Borås and Kumla. The proposed reductions are intended to be met through a combination of voluntary and forced reductions as well as other alternatives such as outsourcing.
Ericsson will also make general cost reductions and take out external costs, primarily by reducing the number of consultants in Sweden by 900, but also through general reductions in operating expenses.
Production in telecom has changed significantly over the past decade with smaller products and a more efficient production - manufacturing time per radio unit has been reduced by more than half. Higher volatility in production volumes has increased the need for flexibility and using partners has become more important. As a consequence, Ericsson is consolidating its own production to fewer sites globally.
The cost in sales and administration will be reduced as a result of the new company structure introduced July 1, 2016, with the aim to create a more efficient and purpose built organization to meet the needs of different customer segments and more quickly seize business opportunities.