Where There Is Smoke, Is There _______?
Europe's mobile phone giants
announce job cuts
By Joanne Aslett and Anthony Clark
Electronics Times
(03/27/01, 10:35 a.m. EST)
LONDON — Ericsson and Nokia, Europe's two mobile
communication giants, will cut a total of about
3,600 jobs to prepare for future commercial
difficulties.
Ericsson will cut about 2,100 jobs in Sweden and
1,200 in the United Kingdom, and Nokia is looking to
cut 300 or 400 jobs in its networking business unit.
Ericsson previously announced plans to end
production at its U.K. plants in Scunthorpe and
Carlton. "The closures in the U.K. and Sweden are
manufacturing sites which Ericsson no longer has
use for," a company spokesman said.
Word of the cutbacks comes just one week before
Flextronics International Ltd., the Singapore-based
contract manufacturer, is due to take control of
Ericsson's worldwide mobile handset production and
shift the bulk of manufacturing to low-cost areas
such as the Far East.
The need to achieve further cost savings of about $2 billion by the
end of this year has persuaded Ericsson to shed its U.K. operations. If
it is unable to find a buyer for those operations, the sites are
scheduled to be closed in the third quarter of 2001.
Last month Ericsson warned that its first-quarter sales will be flat or
lower than sales for the year-ago period, and projected a loss for the
quarter.
"In today's uncertain state of the economy with negative signals
Ericsson must react, and we are now taking necessary measures,"
said Kurt Hellström, president and chief executive officer of Ericsson.
"We have to drive efficiency much harder, with the dedication to
become more competitive than ever before."
Hellström has already frozen recruitment for Ericsson and plans to
reduce its consultants significantly, in some areas by more than 50
percent, and to shift work to internal resources.
The company plans to outline its full belt-tightening program on April
20.
Separately, Nokia said its plan to cut between 300 and 400 jobs at its
networks unit in an attempt to streamline its high-speed Internet
broadband systems division. The cuts will mainly affect R&D staff as
Nokia creates fewer, more focused sites.
The unit's new structure will go into place in the second quarter,
creating two divisions focused respectively on broadband access and
narrowband access.
"The broadband market has lately experienced changes, especially in
the U.S., and we want to proactively develop our mode of operation
to adapt to the new market conditions and increased competition,"
said Olli Oittinen, senior vice president for Nokia Networks broadband
systems group.
Joanne Aslett is technology reporter and Anthony Clark is deputy
editor for Electronics Times, EE Times' sister publication in the United
Kingdom. |
