Ericsson dials up £700m cuts programme

 
Joseph Millis
SWEDISH telecom equipment firm Ericsson yesterday announced that it was cutting 2,200 jobs in Sweden as part of a savings and efficiency programme.

Ericsson said in November it aimed to cut annual costs by around 9bn Swedish krona (£700m), with full effect in 2017.

The programme will effect mainly research and development (R&D), and entail restructuring charges of around 3bn-4bn krona between 2015 and 2017.

Chief financial officer Jan Frykhammar said past increases in R&D spending had partly been aimed at reducing the number of hardware platforms and versions of software.

“Therefore, while we continue to have a very high pace of investments in R&D, there are now possibilities to realise efficiency gains or cost reductions,” Frykhammar said.

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.

Ericsson has moved away from the consumer mobile phone products that made it a household name, after it sold its stake in Sony’s mobile joint venture, which was called SonyEricsson for a time, in 2011.