The first step will be to lay off 250 employees at its US HQ in San Diego, California, with a complete closure of that facility planned for a later date. Spokespeople for the company have also said that it will no longer aggressively look for new customers in the CDMA business.
The move is recognition of the fact that the Stockholm-based vendor that it has never achieved more than also-ran status in CDMA, and since it is already in a process of downsizing (it has gone from 107,000 employees in 2001 to 50,000 now, the underperforming US business was a suitable target.
CDMA has some 240 million subscribers worldwide and is particularly strong in the Americas, as well as in Korea. This compares with an estimated 1.3 billion GSM users, however, and is only slightly countered byte fact that CDMA can claim to be ahead in the deployment of 3G versions of the technology. That said, the market opportunity there for Ericsson, particularly in going up against more established suppliers, was clearly smaller, such that running down the business in the States and concentrating on other areas made more sense.
