Sweden based company Ericsson, after 25% fall in its share price is planning to fire around 3,900 employees including 900 consultants from production, research and development (R&D) and other departments. CEO Jan Frykhammar said in a statement that the measures were necessary to secure Ericsson’s long term competitiveness as well as technology and services leadership. The company said in July it would step up efficiency measures due to a tough market.
Ericsson plans to cut around 3,900 jobs in Sweden, doing away with most of its manufacturing in the country as it grapples with a shrinking market for telecoms network equipment.
The Swedish company, whose share price has fallen around 25% this year and which is looking for a new CEO after Hans Vestberg was ousted in July, said on Tuesday around 3,000 jobs would go in production, research and development (R&D) and other operations, as well as 900 consultants.
“The measures are necessary to secure Ericsson’s long term competitiveness as well as technology and services leadership,” acting CEO Jan Frykhammar said in a statement.
The job cuts deal a blow to Sweden, where Ericsson is one of the country’s biggest employers and where politicians and unions have scrambled in recent weeks to save jobs.
The company said in July it would step up efficiency measures due to a tough market, having already announced a 9 billion Swedish crown ($1.1 billion) cost-cutting program in 2014.
The 1,000 jobs that will go in manufacturing remove the majority of Ericsson’s production in the country, which currently represents about 5% of its global production.
Ericsson, which has backing from two of Sweden’s most prominent investors—Wallenberg-backed Investor and Industrivarden —has come under growing pressure for its poor performance in recent years and for being slow to address stagnating demand for its core base stations.