Ericsson Announces New Efficiency ProgramMarch 27, 2001 by Jeff Shepard
Ericsson (Sweden) announced that it is stepping up its efforts to streamline operations and reduce costs by means of an efficiency program. The program is designed to save the company 20 billion crowns, or US$2 billion, per year beginning in 2002.
The new efficiency program will achieve savings predominately outside of the manufacturing area through a review of all areas including administration, marketing and sales, supply management and research and development. Ericsson plans to slim down its employee base by around 3,000 jobs. To this end, a recruitment freeze has been announced across the company. In addition, Ericsson has decided to reduce its current workforce in Sweden, and to stop production at two plants in the UK, on in Carlton and another in Scunthorpe. Additional measures will be announced when the full program is outlined on April 20, 2001.
"As the world leader in providing wireless infrastructure equipment and a leading supplier of wireless handsets, we remain optimistic about the medium- to long-term growth and profit potential of Ericsson as well as the whole telecommunications industry," said Kurt Hellström. "But this efficiency program is key for us to achieve a solid financial performance in difficult economic times."