The Swedish office of e-consultancy Framfab is to sack 340 employees in a bid to cut costs and scale back its Scandinavian operation.

Johan Wall, Framfab's new CEO, announced the details today as the company reported reduced sales and earnings during Q3 2000.

He blamed changes in market conditions and "low business volumes in relation to the size of the Swedish workforce" for the decision.

Some 70 of those booted out are trial employees and won't be offered full contracts. The cutbacks affect all areas of the business.

Despite the large number of redundancies, the cuts only represent around 16 per cent of Framfab's 2100 workforce in Sweden.

A spokeswoman for Framfab in the UK said the Swedish decision would not affect its business in the UK or elsewhere in Europe and the US.

In a statement, Wall said: "This is an extremely difficult decision that I and Framfab's management have made. But it is necessary to ensure the company's long-term competitiveness.

The restructuring costs are expected to cost around SEK 130 million (£8.9 million), but should save SEK 230 million (£15.8 million) next year, the company said.

Framfab clients include Bosch, Carlsberg and SAAB. ®