Affected by the economic slowdown coupled with the Asian competition ever increasing, Ericsson announced a redundancy plan that will result in hundreds of layoffs.
Through a press release, CEO of Ericsson has announced the closure of the Galve, Sweden, and downsizing to one of Boras, Sweden as well.
This new reduced headcount at the Swedish telecom equipment in addition to the major announcement in January with 5 000 layoffs at the key. It will mean the elimination of 856 positions for the site which closed its doors and the elimination of 90 positions on the existing 1037 for those downsizing or layoffs 946.
The objective of new social plan is to continue reducing costs in the face of unfavorable economic climate with a market showing a regression of 10% for the third quarter 2009 and expected to leave its key players to grow between 0 and 5% 2010, plus competition from Asia increasingly strong.
Upon publication of the latest quarterly results on the period from July to September, earnings of the group blamed a decline of 74% on a shift of one year, despite the measures already undertaken. Hence the need for Ericsson to strengthen its plan of action if it wants to remain competitive.