"It is naturally a difficult message for our employees in Sweden," says Tomas Qvist, head of Ericsson's Human Resources in Sweden. "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. 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," says Qvist.
In absolute numbers, the majority of the reductions are in Ericsson's Networks unit, but all parts of the organization in Sweden are to some extent affected, impacting all its Swedish sites except Falun, Hudiksvall, Kalmar and Katrineholm.
Ericsson joins Nokia Siemens Networks and Alcatel-Lucent SA in reacting to spending cuts among mobile-phone companies hurt by a slowing economy and competition from Chinese manufacturers.
By cutting jobs, Ericsson is acting on a sales forecast it trimmed in March, when it predicted compound growth of between 2 percent and 8 percent through 2014. The manufacturer yesterday said the global market for telecommunications hardware will grow by an average 3 percent to 5 percent a year through 2015, supported by increases in smartphone use.
The Swedish company said it?s negotiating with union representatives and expects to inform all employees affected by the plan by March 2013.