Ericsson to cut hundreds of employees, contractors

Permanent and contractor cutbacks to come over the next six months, but aren’t a result of economic slump, company says

Ericsson Australia and New Zealand will cull approximately 300 employees and contractors across the entire business over the next six months, it announced this week.

The company said the cutbacks are aimed at "improving efficiency and competitiveness" and form the local implementation of a global cost adjustment program involving a range of business and operational processes announced in February this year.

Some 200-odd Ericsson contractors will also get the chop over the same timeframe, in line with the completion of various project commitments.

Ericsson’s spokesperson told ARN the cutbacks weren’t a result of the recent economic slump, and will affect staff at all levels including members of the executive management team. The company said it is projecting a strong year in Australian telecommunications for 2009 despite both Gartner and IDC warning that mobile phone sales and shipments will slow next year.

All employees that are made redundant will receive full entitlements with “above market” terms promised, as well as outplacement, financial planning and counselling support.

Ericsson employs around 1660 permanent employees and about 405 people provided through contracting firms locally.

Worldwide, Ericsson employs 77,350 people, and announced third quarter financial results in October with an operating profit of 5.7 billion Swedish Krona ($US772.5 million) and sales growth of 13 per cent.

Recently, Ericsson made local news with its demonstration of wireless broadband technology that can transmit data at 160Mbps.

The company also has a research project in Sweden, dubbed Tower Tube, that was recently equipped with built-in support for wind power in a bid to help operators go green and expand mobile networks to places where electricity isn’t available.

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