Ericsson to cut 1,550 jobs in Sweden to improve profits

Telecom Lead India: Telecom equipment major Ericsson is planning to cut 1,550 jobs in Sweden to improve profits.

Earlier, Nokia Siemens Networks, Nokia and Alcatel-Lucent announced plans to slash their resources to enhance profitability.

Recently, reported that Ericsson posted 24 percent decrease in India revenue in third quarter of 2012 to SEK 1.73 billion from SEK 2.27 billion in the same period last fiscal.

Regulatory uncertainties and decrease in telecom Capex by Indian telecom operators have affected the financial performance of Ericsson India.

Last week, Ericsson said its global sales decreased 2 percent y-o-y.

Networks sales decreased y-o-y due to weaker sales in parts of Europe, China, Korea and Russia as well as continued decline in CDMA equipment sales. This was partly offset by strong development in North America.

Ericsson said global services increased sales 19 percent.

Ericsson will take action to improve profitability which had suffered from the signature of contracts offering low margins but increased market share.

The cuts, amounting to 9.0 percent of staff in Sweden, would fall widely, affecting people in sales, administration, research and development and procurement, but the networks division would be hardest hit.

The group employs 17,768 people in Sweden. Worldwide, the cuts amount to 1.5 percent of total staff of 109,214.

Ericsson said that it had not determined the timetable but that talks with staff representatives had begun.

The group also said that it would reduce sharply the number of consultants and temporary staff.

Recently, ZTE India said it may consider salary cut to its India employees. Alcatel-Lucent is also planning to cut down on Indian resources.


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