Tuesday, 26 September 2017

Ericsson's restrained response to job cuts talk

By Mary Lennighan, Total Telecom
Friday 18 August 17

Swedish kit maker says it is too early to speculate which employees, countries will be affected by cost-cutting plans.

Ericsson this week published a measured response to a raft of media speculation that a sizeable round of job cuts is on the cards. The Swedish equipment maker reiterated plans shared earlier this year to accelerate its cost…

Ericsson this week published a measured response to a raft of media speculation that a sizeable round of job cuts is on the cards.

The Swedish equipment maker reiterated plans shared earlier this year to accelerate its cost-savings programme, but said it is "too early" to disclose specific measures or to say which countries or employees could be affected.

Its comments came after Swedish daily Svenska Dagbladet cited unnamed sources as saying that Ericsson plans to reduce headcount by 25,000 at businesses outside of Sweden as part of its efficiency drive, as reported by Reuters.

The paper said it is not immediately clear whether the layoffs will include staff at the vendor's media business, which could be sold off.

Ericsson unveiled a major restructuring plan in March, and said it is exploring strategic opportunities for its media and IT cloud hardware units.

Ericsson announced its latest cost-reduction plan a month ago, alongside the publication of a weak set of second-quarter financials.

"The plan is to implement cost savings with an annual run rate of effect of at least 10 billion kronor (€1 billion) by mid-2018, of which approximately half will be related to common costs," it reminded the press this week.

"Ericsson has not communicated which specific units or countries...could be affected," it said. "It is too early to talk about specific measures or exclude any country," added, pledging to communicate further when it executes on its plans.

The vendor did not confirm or deny the 25,000 figure shared by Svenska Dagbladet's sources. However, it insisted that its statement matches the information it sent to the paper.

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