Ericsson unplugs 2,200 more staff

Sweden R&D hit hardest

Ericsson's move to focus on software is to hit another 2,200 jobs in Sweden, the telco vendor has announced.

The cuts focus on roles in R&D and supply, the company's statement says, but admin and sales roles will also be affected, along with external consultants.

The vendor says R&D remains important, but reducing the number of product lines in its key market provided the impetus for slimming down in the home territory.

CFO Jan Frykhammar told Reuters that “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”.

The cuts are expected to yield $US1 billion in savings. However, it will still retain more than 24,000 R&D staff globally, and as noted by the BBC, its R&D spend in 2014 was 16 per cent of revenue.

The cuts will affect Ericsson's operations both in Stockholm and in Katrineholm.

The $US18 billion company had a disappointing 2014, with the final quarter showing particular weakness in America.

Its exit from the baseband modem business was part of the slim-down strategy. Ericsson has pinned its future on 4G and post-4G mobile infrastructure, the Internet of Things, and is working on software defined networks and network function virtualisation strategies. ®

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