The efficiency program reflects the current economic climate. Kurt Hellstrom, president and CEO of Ericsson says: In today’s uncertain state of the economy with negative signals, Ericsson must react, and we are now taking necessary measures. We have to drive efficiency much harder, with the dedication to become more competitive than ever before.
There will be a blanket recruitment freeze and a reduction of the number of consultants, in some areas by more than 50%. It is hoped that this will lead to more efficient and cost-conscious use of consultants than at present.
A total of 2,600 employees will be affected as the company adjusts its manufacturing capacity. The workforce in Kumla, Sweden will be reduced from 3,200 to 1,700 employees and in Linköping, Sweden, there will be a further 600 redundancies. These reductions follow the 500 redundancies already announced earlier this year. Four hundred and seventy-five employees from the Linköping plant will be outsourced to contracting firm Flextronics, who will also take over production and delivery of Ericsson’s mobile telephones. Ericsson will offer affected employees outplacement and training programs.
The efficiency will impact UK Ericsson employees. Operations in Carlton and Scunthorpe are set to cease production by the third quarter. Eleven hundred people are employed at these plants, and a search for a new owner is ongoing.
This efficiency program is key for us to achieve a solid financial performance in difficult economic times, affirmed Hellstrom.
