Ericsson to cut jobs in restructuring

Dylan Bushell-Embling
14 Nov 2014

Ericsson has announced a cost-cutting plan to save 9 billion kronor ($1.22 billion) by 2017, in a move that will involve an unspecified number of job cuts.

The company plans to streamline its portfolio and improve R&D efficiency, transform service delivery and implement supply chain efficiencies.

Ericsson has set aside restructuring charges of around 2 billion kronor. The company aims to achieve half the savings from opex and the other half from cost of sales.

To adapt to market trends, the company plans to bolster its core radio, core and telecom services segments while expanding its presence in Cloud, IP networks, TV and media, OSS and BSS as well as industrial and society applications.

“The key components of our profit improvement plan is to strengthen core business, build strength in targeted areas while at the same time continue to improve our cash flow,” Ericsson CFO Jan Frykhammar said.

“Although we believe OPEX will peak in 2014, we believe we can do more to increase efficiency and reduce cost.”

Ericsson also believes the total network equipment market will grow at a CAGR of 2-4% between 2013-2017.

The telecom services market will meanwhile grow at a 4-6% CAGR over the same period, and the support solutions market is expected to grow at a 7-9% CAGR.

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