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Ericsson Ireland said on Monday that it was seeking 150 voluntary redundancies, which will cut its staff levels in Ireland to around 1,700 in total.
Monday's cuts will come in Ericsson Systems Expertise Limited, the Irish research and development centre for the Swedish supplier of mobile telecom systems. The company's Irish R&D operations employ just over 1,000 people currently and the unit is responsible for what the firm describes as "key software development activities" in the 3G Radio domain, principally relating to Radio Access and Control and Network Management systems.
The company says these activities in Ireland will continue and the job losses will mainly hit management and "peripheral development areas." Management at Ericsson Ireland declined to comment on the news, and although the cuts are voluntary, the company did not provide severance payment details for departing workers.
In the past, Ericsson has said that it would protect its core research and development divisions from job losses if possible. But in April the firm admitted that there was room for cost savings in the Irish unit, making Monday's news not entirely unexpected.
Ericsson has been operating in Ireland since 1957, when the first Ericsson exchange was installed in Limerick, and in the last two years the firm has cut over 200 Irish workers, including 40 staff that were cut in a highly criticised move just days before Christmas 2001.
Last month the company said that its total cuts for this year and 2003 will amount to 20,000 worldwide, and at the time 3,000 of the cuts had already been made. Last year Ericsson slashed its headcount by around 13,000, including cuts connected to the transfer of employees to Sony Ericsson, its new handset joint venture with Sony.
The redundancies from the telecommunications equipment maker came after Ericsson posted deeper than expected losses during the first quarter as orders tumbled 40 percent. In April the firm said that sales had fallen 26 percent compared to the same quarter last year and totalled SEK37 billion, at the lower end of Ericsson's expectations. The company's pre-tax loss was also worse than expected, at SEK5.4 billion, up from its loss of SEK4.9 billion for the same period a year earlier.
The Swedish company also believes that sales in the mobile systems market, a market sector important to the future of its Irish R&D unit, will fall by more than 10 percent this year.
In all, the company's cost-cutting measures are designed to see it reduce its cost base by SEK10 billion at the end of this year and cut an additional SEK10 billion for next year. The company will take restructuring costs of SEK8.5 billion this year and SEK2.0 billion in 2003 for the 20,000 job losses, but it said it expects savings totalling more than SEK106 billion over the next three years.
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