Ericsson succumbs to salami slicing in Sweden

The networking giant continues to respond to challenging times by restructuring, streamlining, right-sizing and countless other euphemisms for shrinking the company.

The long and short of it is that Ericsson will be getting rid of 3,000 jobs in Sweden, with around a third coming from production, a third from R&D, and a third from sales and admin, through a mix of forced and voluntary redundancies. Borås, Göteborg, Karlskrona, Kumla, Linköping and Stockholm sites will all be affected with Borås and Kumla getting the worst of it.

The move is being positioned as part of the existing efficiency programme but that has been underway for some time and, presumably, if things were going better the redundancies would have stopped by now.

“Ericsson is going through a large transformation,” said acting Ericsson CEO Jan Frykhammar. “We continue to have a strong focus on R&D, and since many years, most Ericsson employees work in software development and services, rather than hardware production. The measures are necessary to secure Ericsson’s long term competitiveness as well as technology and services leadership.”

“We have a clear goal that our R&D in Sweden should be world leading, not least in next generation systems,” said Ericsson CTO Ulf Ewaldsson. “In the short term we have to reduce the number of positions in R&D, primarily within administrative roles. At the same time our intention is to bring in new competence in new technologies. Therefore, we intend to recruit approximately 1,000 engineers in Sweden, primarily from universities, over the coming three years.”

It’s been a tough year for Ericsson, as Fykhammar told back in April even before CEO Hans Vestberg was shown the door. It’s facing a competitive perfect storm in its core networking equipment market and its efforts to diversify are not progressing quickly enough to compensate for that. Only when these streamlining announcements cease will we feel confident the company has turned the corner.

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