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Ericsson, Intel latest to cut jobs

Chris Jenkins (MIS Australia) | Jan. 22, 2009
Ericsson will cut 5000 jobs worldwide as part of a programme to reduce costs; chip maker Intel announced plans to shut factories in a move that could affect up to 6000 workers.

SYDNEY, 22 JANUARY 2009 - Swedish telecoms equipment heavyweight Ericsson will cut 5000 jobs worldwide as part of a programme to reduce costs, the news coming as chip maker Intel announced plans to shut factories in a move that could affect up to 6000 workers.

Ericsson said approximately 1000 of the positions would be cut in Sweden.

A spokesman for Ericsson's Australian operation said the company was not yet able to comment on how the cuts might affect the local business.

Ericsson Australia chief executive Jacqui Hey is in Sweden for the company's annual senior executive meeting.

Ericsson announced the job cuts as it posted fourth-quarter and full-year results for 2008.

Fourth quarter sales rose 23 per cent from the same period in 2007, to 67 billion kronor ($12.4 billion), and grew 11 per cent for the full year to 209 billion kronor.

But Ericsson's net profit fell from 22.1 billion kronor to 11.7 billion kronor over the year.


Ericsson chief executive Carl-Henric Svanberg said that the mobile operators that are Ericsson's customers remained mostly in solid financial positions despite the global financial meltdown.

"There is strong traffic growth and the networks are fairly loaded," he said.

"It remains, however, difficult to more precisely predict to what extent consumer telecom spending will be affected and how operators will act.

"To date, our infrastructure business has hardly been impacted at all, but it would be unreasonable to think that this would be the case also throughout 2009."

Intel, meanwhile, announced plans to close factories and "align its manufacturing capacity to current market conditions".

The move included the closure of facilities in Malaysia and the Philippines, as well as sites in Oregon and California in the US.

Intel said the closures were expected to affect between 5000 and 6000 employees, although not all were expected to be made redundant. The changes were expected to be put into effect by the end of the year, Ericsson said.

Several major technology companies have announced moves to cut staff numbers in recent weeks, with Motorola planning to cut worker numbers by 4000 and chip maker AMD culling more than 1000 positions.

Some industry watchers are expecting IBM to shortly announce the layoff of as many as 16000 workers, despite better than expected fourth quarter and full year results announced this week. Microsoft is also being widely tipped to reduce its headcount.

 

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