Swedish telecom equipment maker may end manufacturing in its domestic market to bring down its operational cost. This will result in loss of as many as 3000 jobs, as per confidential documents seen by newspaper Svenska Dagbladet (SvD). Ericsson is one of the oldest companies in Sweden and has been operating manufacturing unit since 1876.
Ericsson has been facing pressure on its margins for some time now. Recently it replaced its Chief Executive Officer, Hans Vestberg. New geographies, such as China, have emerged as lucrative manufacturing destinations for IT firms. (See: What After Hans Vestberg.)
In 2014, Ericsson announced plans to cut annual costs by 9 billion kronor (€949.5 million) by 2017, with half of those savings being generated by a reduction in operating expenses. Earlier this year, the company doubled its operating savings target.
“These measures mean a reduction of the number of employees worldwide. We have large operations in Sweden which are not excluded,” said Ericsson, in a statement on Thursday. “As we always do for any employee reductions, we will handle this on a country-by-country basis and our employees and, where applicable, union representatives will always be informed first.”