European mobile network equipment maker and mobile phone giant Ericsson plans to cut roughly 946 employees in two of its production locations in Sweden. The job cuts are targeted at production staff in the cities of Gavle and Boras, according to news reports.
“We must reduce our production staff because the labour requirement for our products is diminishing as we increase efficiency,” Ericsson Chief Executive Carl-Henric Svanberg said in a statement. “It’s a tough day for us today.”
Nearly two months ago Ericsson reported less than stellar quarterly numbers with a 74 percent decline in net profit that was blamed on lagging sales and struggles with the Sony Ericsson division. Like its Swedish parent, Sony Ericsson has had its share of problems this year, and recently announced its own layoffs globally of about 1,600 employees.
Rival Nokia Siemens has also struggled through the recession. In November, Nokia Siemens announced major job cuts through 2010 that would eliminate up to 6,000 jobs.
The company says it is now using more advanced technology that requires less production staff due to its more simplified mode of operation, hence the layoffs, according to news site The Swedish Wire. TSW writes on the layoffs:
“
In G???vle, where Ericsson designs and manufactures base stations for third generation mobile telephony, activities will be closed down and a total of 856 employees will be affected, of which 545 are white collar and 311 blue collar. In Bor??æs 90 white collar workers of the 1,037 employees will lose their jobs.
”
‘
This is news that no one expected. It really comes as a total surprise,
’
said Johanni Samalistu, chair of the local chapter of the engineers
’
union, to the TT news agency.
‘
We
’
re devastated. Now we have to inform our members of this shocking news.'
”
Ericsson has 18,000 employees globally.
“We’ve considered different alternatives and done several thorough analyses,” said Jan Wassenius, head of production and logistics at Ericsson, to Dow Jones.