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Ericsson To Cut 2,000 Jobs In Its Global Cost and Efficiency Program

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Ericsson continues to execute on strategy to excel in core areas: Radio, Core and Transmission and Telecom Services, to fund growth in the targeted areas: IP networks, Cloud, TV & Media, OSS & BSS and Industry & Society. The pace of change is increasing in the industry, accelerated further by industries converging. The pace of change is also accelerating in Ericsson as the company transforms to ensure leadership in the ICT industry.

As announced at Ericsson’s Capital Markets Day on November 13, 2014, accelerated efficiency measures will start in 2015 and run through 2017 globally. In 2015, the cost and efficiency program activities will mainly target structural improvements in R&D, Service Delivery and Supply globally to secure highly efficient, effective and industry-leading operations to support growth. The establishment of the three global ICT centers with a common test and development strategy and methodology for R&D is part of the long-term structural improvements and efficiencies.

The program includes both headcount reductions as well as savings in external costs across the company’s operations globally. Today, Ericsson is announcing that 2,200 positions in Sweden, mainly in R&D and Supply, are subject to notice.

There will also be efficiencies in sales, general and administration, as well as reductions in external cost, for example related to the number of consultants and consolidation of IT portfolio.

The program targets savings of approximately SEK 9 b. with full effect during 2017. This is a long-term initiative with an ambition to reduce operating expenses and cost of sales across all Ericsson’s operations, units and functions already in 2015 in order to fund growth in targeted growth areas. As previously communicated, annual restructuring normally generates charges of approximately SEK 2 b. In addition, the cost and efficiency program will generate approximately SEK 3-4 b. in restructuring charges in 2015-2017.

Progress updates on the program will be included in Ericsson’s earnings reports.

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Wahengbam Rorrkychand

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