Ericsson AB will be downsizing their workforce and about 2,200 jobs in Sweden will be cut to cut cost which is part of the company's cost-reduction plan to improve profitability as a result of slowing sales. The majority of it will be in the research and development and supply functions, it is about 2% of the company's workforce. The plan was announced back in November to lessen spending by 9 billion kronor ($1 billion) over three years.
Ericsson is the world’s largest manufacturer of wireless networks. Their goal is to boost earnings since their main rivals Nokia Oyj and Huawei Technologies Co. are beating them out in sales growth amid a prolonged period of slow industry wide expansion. The company predicts that the wireless-network gear market will grow at an average 2 to 4% a year through 2017.
About half of the positions affected by the cutbacks are in Stockholm, while Ericsson will shut its operations in Katrineholm, according to Ericsson. They have also axed 1,550 jobs in the Sweden back in 2012. Fourth-quarter sales per worker totaled about $77,500, compared with $87,000 at Finnish rival Nokia, according to data compiled by Bloomberg.
