Ericsson cuts 2,200 Swedish staff as part of savings program
A general view of an office of Swedish telecom giant Ericsson is seen in Lund, September 18, 2014.
Credit: Reuters/Stig-Ake Jonsson/TT News Agency
STOCKHOLM (Reuters) – Ericsson will cut 2,200 jobs in Sweden, mainly in research and development (R&D) and supply, as part of its latest cost-cutting program, the Swedish telecom equipment maker said on Wednesday.
Ericsson said in November it aimed to cut annual costs by around 9 billion Swedish crowns ($1.05 billion), with full effect in 2017. The program will entail restructuring charges of around 3-4 billion crowns between 2015 and 2017.
Chief Financial Officer Jan Frykhammar said past increases in R&D spending had partly aimed at reducing the number of hardware platforms and versions of software, while Ericsson had also worked on structurally improving R&D efficiency.
“Therefore, while we continue to have a very high pace of investments in R&D, there are now possibilities to realize efficiency gains or cost reductions,” Frykhammar said. He declined to say how many of the planned job cuts would be in R&D.
Ericsson spent 36.3 billion Swedish crowns ($4.2 billion) on R&D in 2014, or 15.9 percent of its revenue, up from 32.2 billion the previous year.
At the end of 2014, Ericsson employed 118,000, including 17,580 in Sweden and around 25,700 in R&D globally. Only India had more Ericsson employees than Sweden, at close to 20,000.
(Reporting by Sven Nordenstam; editing by Simon Johnson and Jason Neely)