Troubled Swedish telecommunications network equipment manufacturer, Ericsson, plans to cut 3,900 jobs in the country.
The sack will do away with most of the company’s manufacturing in Sweden even as the company continues to struggle with dwindling market for its telecom network equipment.
Ericsson was the world’s leading telecom network equipment supplier for many years until Huawei of China overtook it in 2012. Since then, Ericsson’s market share continues to shrink year-on-year.
As a serious sign of the times, Ericsson sacked its Chief Executive Officer, Hans Vestberg, in July this year. The Swedish company’s share price has also fallen around 25 per cent this year alone even as it continues to shop for a CEO to replace Vestberg.
This Tuesday, October 4, 2016, Ericsson said around 3,000 jobs would go in production, research and development (R&D) and other operations, as well as 900 consultants.
“The measures are necessary to secure Ericsson’s long term competitiveness as well as technology and services leadership,” acting CEO Jan Frykhammar said in a statement.
The job cuts deal a blow to Sweden, where Ericsson is one of the country’s biggest employers and where politicians and unions have scrambled in recent weeks to save jobs.
Ericsson currently employs about 16,000 people in Sweden.
The company said in July it would step up efficiency measures due to a tough market, having already announced a 9 billion Swedish crown ($1.1 billion) cost-cutting program in 2014.
The 1,000 jobs that will go in manufacturing remove the majority of Ericsson’s production in the country, which currently represents about 5 per cent of its global production.
Ericsson, which has backing from two of Sweden’s most prominent investors – Wallenberg-backed Investor (INVEb.ST) and Industrivarden (INDUa.ST) – has come under growing pressure for its poor performance in recent years and for being slow to address stagnating demand for its core base stations.