Ericsson to eliminate 10% North American workforce

Swedish wireless network company Ericsson is planning to eliminate 10 per cent of its workforce throughout North America as part of its plan to reduce costs amid declining sales.

The job cuts would be less than 10 per cent of its 14,800 workforce in the region, Ericsson said yesterday.

''We are constantly examining workforce needs to ensure we have the best people, with the right competencies, in the right places," the Stockholm-based company said in a statement.

Ericsson had 104,525 employees globally in end 2011, but added an extra 2,600, with a majority in North America due to the acquisition of network software company Telcordia in January.

The job cuts will not affect Telcordia staff.

Ericsson, which has recently been expanding in North America, saw its sales drop by 21 per cent in the fourth quarter of last year, mainly in the US market as its CDMA business came under pressure from rivals Verizon and Sprint, who moved to the next generation LTE technology.

In 2009 Sprint signed a $5 billion seven-year network outsourcing deal with Ericsson and transferred 6,000 Sprint employees in the US to the Swedish company, while Clearwire inked a similar deal with Ericsson for managing its mobile WiMAX network.

Ericsson, which also acquired the wireless equipment business of Nortel Networks in 2009 and BelAir Networks in 2011, blamed the fourth-quarter US sales decline on a temporary lull in investment after a period of heavy spending, as well as the after effects of consolidation.