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Ericsson axing 1,550 Swedish jobs to cut costs

Communications technology and service provider Ericsson has announced plans to reduce its operations in homeland Sweden by cutting 1,550 jobs. The series of layoffs will cover all job areas with the individuals concerned being informed of their fates by March 2013.

Ericsson’s domestic staff numbered 17, 768 on 30 September and the company has already entered redundancy negotiations with union representatives.

"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," said the Swedish operations' head of human resources, Tom Qvist. "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,”

The mobile network manufacturer reported a drop of 43 per cent in net profits during the third quarter. The loss has been attributed to the negative economic climate which has caused operators to be wary of investment in infrastructure.

The corporate restructuring will complement a projected upturn in profits as Ericsson believes the expansion of the smartphone market will drive demand for better service. The increased demand is expected to spur a growth rate of three to five per cent within the network equipment market.

"Mobility is becoming even more relevant in the networked society, driving the demand for our offering," said Hans Vestberg, CEO and president of Ericsson in a statement to investors.