The workforce reduction will affect 1,000 positions in production, 800 in R&D and 1,200 in other operations in Sweden, at the sites Boras, Goteborg, Karlskrona, Kumla, Linkoping and Stockholm. Ericsson said it intends to make "significant reductions" at the production sites Boras and Kumla, and the staff reductions will be met through a combination of voluntary and forced reductions as well as other alternatives such as outsourcing.
Ericsson will also make general cost reductions and take out external costs, primarily by reducing the number of consultants in Sweden by 900 and also through general reductions in operating expenses. While the company is cutting staff in R&D, it said this affects mainly administrative roles, and over the coming three years it intends to recruit 1,000 engineers in Sweden, primarily from universities.
Ericsson has started talks with unions on the restructuring and aims to complete the process in Q1 2017. The shutdown of operations in Boras and Kumla is expected to take longer and be completed during the second half of 2017.
Overall, the company said its plan to save SEK 9 billion during 2017 is progressing according to plan. In addition, the company announced in July additional measures to reduce the annual run rate of operating costs to SEK 53 billion in the second half of 2017 from SEK 63 billion in 2014, which it says is double the previously targeted savings. Total restructuring charges for 2016 are estimated still at SEK 4-5 billion.
