In 2014, Ericsson announced plans to cut annual costs by 9 billion kronor (€949.5 million) by 2017, with half of those savings being generated by a reduction in operating expenses.
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The announcement throws in to doubt the future of Ericsson’s equipment production in the country, where it has made telegraph and telephony equipment for over 140 years.
Reports have said Ericsson is considering laying off some 3,000 employees at its network-products unit in Sweden.
“It’s absolutely not certain they will be closed”, Norlander said.
“This plan would kill Ericsson and be a first step towards phasing out all of its operations in Sweden”, a source at the company told SvD.
“We have large operations in Sweden, which are not excluded”, its communications department said in an email. The report details the company’s plan to end all manufacturing in Sweden and estimates 2,850 jobs will be affected.
Demand has plummeted in developed markets due to many advanced networks already being completed. That program is meant to save the company $1.05 billion by year-end 2017.
The company is going through a turbulent period, trying to revive earnings growth through job eliminations while battling Huawei Technologies and Nokia. However, on 19 July this year, Ericsson doubled its operating savings target, and a week later, Ericsson CEO Hans Vestberg resigned.
Shares of Ericsson gained 2.7 per cent to 59.60 kronor at the close on Thursday in Stockholm.
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The cuts are part of Ericsson’s previously announced cost and efficiency program that it first revealed in 2014. Earlier that month, the company said it would accelerate cost cuts after reporting four straight quarters of disappointing revenue and profit.
