Ericsson announces layoffs
TELECOMMUNICATIONS EQUIPMENT MANUFACTURER L.M. Ericsson Telephone is announcing a series of cost-reduction measures that will include hundreds of job cuts.
The company's manufacturing workforce in Kumla, Sweden, will be reduced from 3,200 to 1,700 employees, Ericsson said in a statement Tuesday. An additional 600 jobs will be eliminated in Linköping, Sweden, as the company outsources the consumer products facility there to contract electronics manufacturing company Flextronics International, reducing the workforce to about 475.
Ericsson added that it will terminate mobile phone production at its U.K. plants in Carlton and Scunthorpe, effective in the third quarter. The company is searching for a buyer for the plants, but hinted that layoffs could be on the horizon for at least some of the 1,200 employees there.
A hiring freeze and a reduction in the number of outside consultants used, in come cases by as much as 50 percent, will provide further savings.
Ericsson said its target is to reduce costs by at least $1.9 billion by the end of the year. Most of the savings will come from "outside of the manufacturing area through a fundamental review of all areas including administration, marketing and sales, supply management, and research and development," the company said.
The company revised its earnings projections for the first quarter downward earlier this month, stating it is expecting revenue to be "flat or somewhat lower," for a loss in the range of $380 million to $475 million kronor.
Additional cost-cutting measures will be announced when Ericsson lays out its full savings program on April 20.
» posted by ITworld staff
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