Ericsson says Swedish staff cuts running ahead of plan

Reuters News
Posted: Dec 08, 2016 3:12 AM

STOCKHOLM (Reuters) - Struggling telecom equipment maker Ericsson <ERICb.ST> said on Thursday sweeping staff cuts in its Nordic home market were running ahead of plan, resulting in higher restructuring costs this year than previously forecast.

The company said in October it was cutting about a fifth of its Swedish workforce and hundreds of consultants as it grappled with shrinking markets and competition from China's Huawei [HWT.UL] and Finland's Nokia <NOKIA.HE>.

There has been some speculation among analysts and staff at Ericsson about whether the company might need to implement further cost savings to deal with tough market conditions.

The company said on Thursday it expected restructuring costs this year of 5.5-6.5 billion Swedish crowns ($606-717 million), higher than a previous estimate of 4-5 billion.

"Restructuring charges for 2017 are expected to somewhat decrease as a consequence of faster implementation of the Swedish reduction activities," the company said.

A precise estimate will be announced in January.

The company said as part of its October plan to shed 3,000 jobs in production, research and development and sales in Sweden and 900 consultancy positions, 1,600 employees had volunteered to leave and that no further forced staff reductions in the country were planned.

Founded in 1876 as a maker of telegraph equipment, Ericsson is one of Sweden's biggest employers with a global staff of 115,000 in 180 countries.

It said in July it would step up efficiency measures, having already announced a 9 billion Swedish crown ($1.1 billion) cost-cutting program in 2014.

($1 = 9.0711 Swedish crowns)

(Reporting by Mia Shanley; editing by Alistair Scrutton/Keith Weir)