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Ericsson announces major Swedish lay-offs

Published: 08 Dec 2009 14:16 GMT+01:00
Updated: 08 Dec 2009 14:16 GMT+01:00

Swedish telecom equipment manufacturer Ericsson has announced a wave of redundancies which will affect nearly 1,000 workers in Sweden.

Ericsson said on Wednesday it plans to ditch its operations in Gävle in eastern Sweden, in a move set to hit 856 workers.

In Gävle, Ericsson designs and manufactures base stations for third generation mobile telephony. The location also serves as a major logistics hub, according to the company’s website.

“This is news that no one expected. It really comes as a total surprise,” said Johanni Samalistu, chair of the local chapter of the engineers’ union, to the TT news agency.

“We’re devastated. Now we have to inform our members of this shocking news.”

In addition, the company will make 90 white collar workers redundant in Borås in the south west, currently home to more than 1,037 Ericsson employees, of which 612 are white collar employees and 425 are workers covered by collective wage agreements.

“It’s a tough day for us today,” said Ericsson CEO Carl-Henric Svanberg in a statement.

“We have to reduce the number of employees in our production operations because the amount of labour required to make our products has shrunk at the same time as we’ve become more effective. It’s a tough blow for Gävle and Borås.”

Ericsson said in a statement that a new way of working has led to a reduced need for manpower.

“We’ve considered several alternatives and performed a number of deep analyses,” said Ericsson’s head of production and logistics, Jan Wassenius.

“Because we soon won’t be able to employ everyone in Gävle and Borås, today we’ve started negotiations with unions about the closing of Gävle and downsizing in Borås.”

TT/The Local (news@thelocal.se)

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Your comments about this article

15:08 December 8, 2009 by Kevgio
yes that new way of working is called made in china.
15:27 December 8, 2009 by calebian22
"It's a tough day for us today," said Ericsson CEO Carl-Henric Svanberg

I am guessing he is going home to his nice house, job still intact. In the final analysis, it wasn't that tough a day for him. I love the use of "us" and "we" by executives.
15:32 December 8, 2009 by EtoileBrilliant
The exiting CEO gets to give all the bad news. The new CEO had a half page profile in yesterday's FT - he was far more bullish. Case of "good cop/bad cop"
15:41 December 8, 2009 by Luckystrike
Carl-Henric Svanberg is off to run BP in London next year....think he'll get a good enough sleep tonight ^^
15:49 December 8, 2009 by xykat
The last permanent job I had in Sweden was within the Telecom industry 6 years ago for an Ericsson subcontrator, Enea. 100 people lost their jobs during the last Telecom slump including me and this was only at the company. Ericsson had laid off a lot of people that time too. Since then it has been incredibly difficult to find a permanent job. Employers seem to only want to hire temps.

I think the Swedish government really needs to clamp down on employers who abuse this hiring method and give employers incentives to hire people permanently.

My experience is that it is always "better you then me" kind of thing. Its rare that an upper boss will have any feelings how he/she is effecting the lives of the people that are being laid off. Some care and some don't.

I was laid off 7 months ago and then the president of the company acted as if the "restructuring" wasn't economically related but just different priorities and a hint that the investors wanted to see a higher return on their investment. In the meetings where he talked about restructuring he kept on talking about a boat and how we were all trying to keep the team together even with limited hands on board. A good analogy but a bad example. A lot of the Swedish employees joked that he was laying off people just to update his million dollar boat.

I guess times might be getting harder...
15:50 December 8, 2009 by skatty
Anyway; I have never seen any particular wisdom either in Ericsson's hiring, or firing!!

I'm wondering how it gets market!! May be, it's time for china to take over.
16:23 December 8, 2009 by krigeren
For decades Swedens underlying model of the "Third Way" was a big attraction.

It allowed all the Ivy Leaguers and think tanks from developing countries to study Sweden and promote the ideas in a positive light when it worked.

The Third Way is not fashionable anymore. The lights at the top of the tree are not illuminating Sweden they way they used to.

On the other hand, the rest of the world has caught up...theres really not much they can do in China/India/Eastern Europe that they don't do here.

The Same goes for other Western nations......we have lost our competitive advantage in many areas and now our high infrastructure costs are weighing us down and we are being beaten at our own game and we only have ourselves to blame.
16:38 December 8, 2009 by RedEagle
What a nice way to say Merry Christmas……lets see who's next on the corporation greed list
17:02 December 8, 2009 by GefleFrequentFlyer
I guess, the Gavle Goat is guaranteed to go up in flames this year.

Wow, that's going to hurt us.
23:21 December 8, 2009 by Alma
Jobs get outsourced to places with cheaper labor. But it is not just the jobs, it is also the technology that gets there. People learn how to make phones, cars, planes, i.e. intellectual property, and open their own businesses which then compete with the initial business.

Thus for short time labor savings, we give out the technology bits and secrets and enable them to become our competitors in a 5-10 years.

It is a lose - lose situation, and I am baffled how very few people are thinking about this.
00:36 December 9, 2009 by Twiceshy
Alma you should look up Ericsson's history, in particular how it started:

http://en.wikipedia.org/wiki/Ericsson#Foundation
20:16 December 9, 2009 by tthonline
All those kind of companies and managements are there to increase the shareholder value... that's their only purpose. As long as employees can contribute to this - they are human capital. As soon as they can't support a growing share price anymore - they are redundant.

Two comments:

1. Anyone who has own money invested at stock market should just be quiet here. You're a driving player in this game.

2. It's our well accepted religion of steady growth and the myth of growth is necessary to keep our standard of living that creates this kind of things. If one can't grow the output anymore one can still downsize the input to increase the profit.

I guess we have to find something new to fight for - not just growth - then we may also find that money is nothing else than color-printed paper.
22:28 December 10, 2009 by Staffs
The outsourcing is not the source of the problem, it's the symptom.

The problem is high cost burdens that require Swedish workers to demand high wages to support all of the obscene burdens placed on them and their companies by GOVERNMENT.
15:21 December 12, 2009 by randyt
I was laid off from Ericsson back in late 2004 in Richardson/Plano, TX. I have two observations.

One: Another X-Ericsson friend of mine from Mexico was laid off during that 2002-4 melt down. He now works in Chile. In a brief email exchange a year ago he was telling me about all the Chinese equipment now on the market that is just Ericsson cloned equipment.

Second: A year before my lay off I was to go to Brazil to teach an RF course. Brazil would not give me a visa as that one week course I would teach would take a job away from one of their workers! Come forward to 2008 when I has hired through a contractor to do some RF training for Ericsson. I had to attend two course in the Plano facilities. Both were taught by the same instructor from Brazil on a temp work visa to the states. Of the 20 students or so attending all were in the states on long term work visas.

My point, the fair trade pushed by corporations serve no one but the CEOs and share holders that look only at the $$ bottom line, not the human cost.

I notice a few folks want to blame the government and their regulations. I suggest if you allow the corporations to go 100% unregualted with out any unions we will end up as slaves.

The fair trade agreements allowing our race to the bottom to continue do not protect neither the Swedish or American workers. These agreements allow for the continued race to the bottom for all working people in the Western World and continued riches for a few.

The next story down is one about former Volvo directors opposing the sale of Volvo to China. If I was in Sweden and working for any Swedish company I would be screaming the same thing, because if Volvo goes to China all your other companies eventually will also. Hope you enjoy working at the local Walmart!
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