Ericsson has announced 2,200 jobs will be lost in Sweden over the coming year, part of the company’s plan to cut costs by £700 million before 2017.
The positions will be in the R&D and Supply sectors in Sweden, and takes almost 10 per cent of the Swedish workers out of Ericsson.
This is one of the largest cutbacks Ericsson has issued, following a debt of £150 million per year for the networking giant. The Swedish company currently employs 115,000 people worldwide.
The company has been trying to get newer mobile companies to pay up for patents, including Chinese smartphone maker Xiaomi, who has skirted around the issue of paying Ericsson through only operating in Mainland China.
Having these smartphone makers now come to other countries gives Ericsson a new way to earn extra revenue. Xiaomi will most likely settle with Ericsson every time, to speed up the rate of sales in a new region.
“There will also be efficiencies in sales, general and administration, as well as reductions in external costs, for example related to the number of consultants,” the company said.
Ericsson seems to have become inflated by the sheer amount of its employees, similar to Nokia when it had the burden of thousands of mobile employees. Nokia post-mobile has been able to rack up a nice profit on patents, networking and mapping technologies.