The Swedish technology company and one of the top telecom equipment makers in the world will adopt a combination of voluntary and forced reductions as well as other measures such as outsourcing for the proposed job reduction.
Ericsson aims to save SEK 9 billion during 2017. In addition, the company announced on July 19, 2016, additional activities to reduce the annual run rate of operating expenses, excluding restructuring charges, to SEK 53 billion in the second half of 2017.
Ericsson has 115,000 professionals globally including 16,000 employees in Sweden. The proposed reduction affects approximately 3,000 positions — approximately 1,000 jobs in production, approximately 800 in R&D and approximately 1,200 in other operations.
Ericsson said the job reduction in the headquarter follows change in operations and adjustment of competence to meet technology shifts, new customer groups and a continued increased proportion of software development.
Ericsson will make significant reductions in operations in Boras and Kumla, in line with the company production strategy, consolidating to fewer production sites and continued work with partners.
Ericsson to hire for R&D
Ericsson intends to recruit about 1,000 R&D positions in Sweden over the coming three years, mainly from universities, to support the company’s competence buildup in new technology and customer domains.
“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,” said Jan Frykhammar, president and CEO of Ericsson.
Ericsson in Sweden is the base for R&D in radio technology and 5G. Ericsson has invested SEK 7 billion in three global ICT centers supporting R&D operations and forming the base for new digital business models. Two of them are in Sweden, in Rosersberg and in Linkoping, strengthening Sweden’s role as a platform for R&D in Ericsson.
“We have to reduce the number of jobs in R&D, primarily within administrative roles. We intend to recruit approximately 1,000 engineers in Sweden, primarily from universities, over the coming three years,” said Ulf Ewaldsson, chief strategy and chief technology officer of Ericsson.
The proposed job reductions will impact operations on the sites in Sweden: Boras, Goteborg, Karlskrona, Kumla, Linkoping and Stockholm. Ericsson will cut significant number of jobs in Boras and Kumla.
Ericsson will reduce cost, primarily by reducing the number of consultants in Sweden by 900 and via 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. Ericsson is consolidating its own production to fewer sites globally.
