More cuts to come at Ericsson?

9 Apr 2003

Newly-installed Ericsson boss, Carl-Heinric Svanberg, has already begun living up to his reputation as a cost cutter, just one day into the job.

In a newspaper interview following last week’s gloomy prognosis for the telecoms market at the company’s AGM, he said: “We are good at inventing products and we are good at selling our technologies to customer. We are not good at how we organise workflows. We need to simplify and be clearer.”

He added these changes would mean “less people in the same sales development”.

It’s feared the latest talk of restructuring may indicate further job losses are on the way for the company, which has faced swingeing cuts over the last couple of years. Ericsson used to employ in the region of 2,300 in its Irish operations. It now employs approximately 1,500 people in its Clonskeagh, Athlone and Dun Laoghaire facilities and it’s now feared more job losses could be on the way.

Analysts are already predicting that globally 10,000 more cuts could be made.

At the AGM last week the company said it saw no end to the recession in the telecommunications market, warning it would engage in more restructuring and may look at getting rid of its non-core business. However, it’s thought its joint venture with Sony, the loss-making handset project Sony Ericsson, looks safe enough for the moment. Svanberg said: “I get a good impression when I am there and can see a clear value in our ownership of Sony Ericsson.” Earlier this year the joint venture received a €150m cash injection after poor performance and a sliding market position.

The Swedish telecommunications giant has suffered nine consecutive quarterly losses.

The company, which employs around 60,000 worldwide, has already slashed its workforce by a whopping 50,000 in the past couple of years.

Svanberg was announced as replacement to Kurt Hellstrom in February.

It is due to release its first quarterly result for 2003 on the 29th of this month.

Efforts by to contact spokespeople for Ericsson’s Irish operations for comment were unsuccessful.

By Suzanne Byrne