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UNEMPLOYMENT

Unions slam Ericsson for factory closure

Ericsson is to close its factory in Nynäshamn, near Stockholm, the company has announced. Ericsson says that the factory is no longer needed, as the base stations that it produces can now be made with fewer workers at its other plants in Sweden.

Published: 22 February 2005 21:02 CET

The news, which comes barely two weeks after the company announced record profits of 28 billion kronor, was greeted with dismay by unions.

“We had no idea that this was going to happen,” said Christer Söderström, chairman of the local branch of the Metall union. “A few weeks ago the management was saying how well everything was going.

The closure is a further blow to Nynäshamn after the decision by the government to close the Muskö military base in the town, with the loss of some 700 jobs. It is also likely to reawaken anxiety among Ericsson employees, where 8,000 jobs have been cut in the last two years. There were hopes that news of the company’s large profits would signal an end to closures at the company.

Göran Johnsson, national leader of Metall, said that when Ericsson CEO Carl-Henric Svanberg called him to warn him about the redundancies, “I told him that this would lead to a great deal of turbulence, given the large profits and dividends that had been handed out to shareholders.”

Kurt Jofs, deputy CEO of Ericsson, said that he could understand resentment at the closure when things were going so well for the company. But he added that Ericsson was operating in a “competitive world” and “our future hangs on decisions we make today.”

But Johnsson told Sveriges Radio that Ericsson should at least keep parts of the factory open for a while, to give people a chance to “wind down”.

“There’s too much emphasis on the share price and dividends, and not enough emphasis on social responsibility,” he added.

For the government’s part Hans Karlsson, minister for working life, called on Ericsson to take its responsibility for the people losing their jobs in Nynäshamn. He also reminded the local employment offices of their duty to provide the necessary resources to help those hit by the closure.

But he said that there was no need for the government to take special measures to help find jobs for those affected. He pointed out that Nynäshamn was within commuting distance of Stockholm, and was therefore better equipped to absorb the redundancies.

Sources: Dagens Nyheter, Svenska Dagbladet, Sveriges Radio

SWEDEN AND UKRAINE

Ericsson suspends all Russia operations indefinitely

Swedish network equipment maker Ericsson said Monday that it was suspending all of its Russian operations over the war in Ukraine for the foreseeable future.

Published: 11 April 2022 19:42 CEST
Ericsson suspends all Russia operations indefinitely

The telecom giant already announced in late February that it would stop all deliveries to Russia following Moscow’s February 24 invasion of Ukraine.

“In the light of recent events and of European Union sanctions, the company will now suspend its affected business with customers in Russia indefinitely,” Ericsson said in a statement.

The company added that it was “engaging with customers and partners regarding the indefinite suspension of the affected business.”

“The priority is to focus on the safety and well-being of Ericsson employees in Russia and they will be placed on paid leave,” it said.

READ ALSO: How has Sweden responded to Putin’s war in Ukraine so far?

Hundreds of Western firms ranging from Ikea to Coca-Cola, Goldman Sachs and McDonald’s have stopped operations in the country since the invasion, with French banking group Societe Generale announcing Monday it was selling its stake in Russia’s Rosbank.

Ericsson has around 600 employees in Russia, and is a “major supplier to the largest operator MTS and the fourth largest operator Tele2,” a company spokeswoman told AFP, adding that together with Ukraine, Russia accounts for less than two percent of revenue.

As a result, the equipment maker said it would record a provision for 900 million Swedish kronor ($95 million, 87 million euros) for the first quarter of 2022 for “impairment of assets and other exceptional costs,” though no staff redundancy costs were included.
Ericsson is due to publish its first quarter earnings on April 14.

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