Ericsson announces 1,500 job cuts
Swedish telecoms kit maker feeling global slowdown in operator business
Ericsson is to axe over 1500 jobs in its home market Sweden as it endeavours to reduce costs, Reuters reported today.
The telecoms equipment maker faced a third-quarter core profit drop of 42% as it struggled in an industry facing sluggish spending by operators. Ericsson has been forced to switch attention to less profitable contracts as business has slowed.
"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," Tomas Qvist, head of human resources at Ericsson said in a statement, as the company announced its intentions to reduce its 17,768-strong workforce by 1,550.
"To secure this we need to focus on reducing cost, driving commercial excellence and operational effectiveness."
As the company reiterated its $597m projection of restructuring costs for the year, its share price dropped 0.7% in the wake of the announcement.
Ericsson's European rivals have been feeling similar pressure. Alcatel Lucent recently announced its intentions to sell assets to strengthen its bottom line and Nokia Siemens is to shed a quarter of its employees in a bid to save $1.28bn by the end of next year.
Farther afield, Asian competitors are also feeling the slowdown; China's ZTE Corp and Huawei Technologies face the same weakened sales.