Ericsson to slash 2,200 jobs across Sweden

UPDATED: Swedish telecom giant Ericsson is set to cut 2,200 jobs in Sweden, the company has announced in a press release.

Ericsson to slash 2,200 jobs across Sweden
Ericsson CEO Hans Vestberg. Photo: Jonas Ekströmer/TT

Workers will be laid off at the company's offices in Stockholm, Katrineholm, Borås, Kumla, Göteborg, Linköping and Karlskrona.

Sweden's capital Stockholm will be hit the worst, with 1,125 staff being let go. 200 jobs will go in Borås, 140 in Gothenburg, 130 in Kumla, 120 in Linköping and 85 in Karlskrona. The facility in Katrineholm will shut down completely.

According to the company, negotiations with unions are underway and workers affected by the layoffs will receive notice in June.

"This hits incredibly hard at all those who work at Ericsson and have loyally worked for the company's development. It also hits all the towns affected and especially Katrineholm," the chairman of Swedish union IF Metall, Anders Ferbe, said in a statement.

"We have seen factory upon factory being dismantled in the telecom and pharmaceutical industries – which used to be the pride of Sweden. There is a risk that research and development will go down the same path if we don't act," he added.

The layoffs are part of a money saving bid to save almost 9 billion kronor ($1bn) worldwide by 2017, said the Ericsson press release.

And telecom analyst Daniel Djurberg at Swedish bank Handelsbanken told news wire TT that the decision did not come as a surprise.

"If a company has to save nine billion, you can predict that employees and consultants will have to go," he said.

The move comes amid a week of turmoil for the Swedish telecom industry, after an announcement by Sony Mobile on Monday to cut 1,000 jobs at its facility in Lund.

Chief economist Jesper Ahlgren at liberal thinktank Timbro was among those warning that the wave of layoffs may pose challenges for Sweden to compete on the world market.

"It is a concern, particularly when it involves the research intensive companies. In Sweden it's mainly a few large private companies, like Ericsson and Astra Zeneca, who put a lot of effort into research. It is difficult to see how we would be able to maintain our competitive power if they downsize," he told The Local on Wednesday morning.

"This puts a lot of pressure on the government to act. Sweden needs to get its act together. We are very dependent on big companies for research and we need to look not only at how we support them, but also at how we encourage new companies to also take up the mantle," he added.

Ericsson CEO Hans Vestberg said the decision was inevitable and added more cutbacks are to be expected around the world.

"The view people ought to take of Ericsson is that we consolidate our position as world leaders in all the areas we work in. Unfortunately that also means a constant streamlining process," he told news wire TT.

Sweden's Enterprise Minister Mikael Damberg was told of the layoffs on Tuesday evening.

"I have appointed a group of secretaries of state from five ministries to co-ordinate the government offices' work on this issue, to stay in touch with local and regional actors and to ensure that the government offices are ready to act," he told TT.


Ericsson suspends all Russia operations indefinitely

Swedish network equipment maker Ericsson said Monday that it was suspending all of its Russian operations over the war in Ukraine for the foreseeable future.

Ericsson suspends all Russia operations indefinitely

The telecom giant already announced in late February that it would stop all deliveries to Russia following Moscow’s February 24 invasion of Ukraine.

“In the light of recent events and of European Union sanctions, the company will now suspend its affected business with customers in Russia indefinitely,” Ericsson said in a statement.

The company added that it was “engaging with customers and partners regarding the indefinite suspension of the affected business.”

“The priority is to focus on the safety and well-being of Ericsson employees in Russia and they will be placed on paid leave,” it said.

READ ALSO: How has Sweden responded to Putin’s war in Ukraine so far?

Hundreds of Western firms ranging from Ikea to Coca-Cola, Goldman Sachs and McDonald’s have stopped operations in the country since the invasion, with French banking group Societe Generale announcing Monday it was selling its stake in Russia’s Rosbank.

Ericsson has around 600 employees in Russia, and is a “major supplier to the largest operator MTS and the fourth largest operator Tele2,” a company spokeswoman told AFP, adding that together with Ukraine, Russia accounts for less than two percent of revenue.

As a result, the equipment maker said it would record a provision for 900 million Swedish kronor ($95 million, 87 million euros) for the first quarter of 2022 for “impairment of assets and other exceptional costs,” though no staff redundancy costs were included.
Ericsson is due to publish its first quarter earnings on April 14.