Ericsson Korea pushing for mass layoffs, clashing with labor union
Ericsson Korea, a subsidiary of the world's biggest producer of mobile networks, yesterday moved to lay off the bulk of its employees, sparking uproar among its labor union.
The labor union, which was mobilized June 5, said Ericsson's mass layoff is illegal under the Korean labor law.
It said the company ordered 19 employees to accept two-month "paid administrative leave" and told 10 employees to prepare for the planned layoff. Ericsson Korea's total employees number 87 (including 4 foreign workers and 5 temporary employees).
Ericsson's labor union said paid administrative leave is a stage that leads to layoff and once the term of the leave is complete, all the employees involved could be laid off immediately.
The unusual labor dispute at a subsidiary of a foreign company in Korea came after Ericsson has lost face in the booming domestic wireless equipment market twice in recent months.
Late last month, Ericsson was booted out of the W-CDMA third-generation mobile equipment bidding for KT ICOM, a mobile unit of telecom giant KT Corp. Ericsson swallowed the bitter defeat while its competitors - LG Electronics, Samsung Electronics, Nortel Networks - passed the bidding to proceed to the final round.
Given that Korea belongs to the early adopter group in terms of W-CDMA 3G service, Ericsson's disqualification for KT ICOM's bidding was forecast to undermine its corporate image in the domestic market and elsewhere.
More importantly, Ericsson was expected to restructure its Seoul office as a result of its failure in the bidding for the much-coveted mobile unit.
Prior to the botched bidding for KT ICOM, Ericsson failed to pass the second round of equipment bidding for its W-CDMA 3G service for SK IMT, a unit of top mobile carrier SK Telecom, May 10.
The two defeats in a month were expected to jolt Ericsson Korea and its headquarters in Sweden. However, an Ericsson official in Seoul said that the company is a supplier for 36 mobile carriers, which means the disqualification in Seoul would not lead to a significant loss.
It remains to be seen whether the two failures to win the 3G equipment bidding in Korea have any tangible impact on the overall operations of the Swedish company. But what's certain is that its Korean subsidiary is reeling and its local employees in Seoul are fuming over the mass layoff.
Ericsson's labor union said the company sent an e-mail to 50 employees June 4, encouraging them to resign voluntarily. "The company threatened to force a layoff after a one-month interval unless employees submit resignation letters by June 7," the labor union said.
"Mass layoff requires a negotiation with the representatives of employees and the company should do its best to minimize such layoffs under the legal regulations, but Ericsson did not follow the rules and attempted to sack employees by force," it said.
Ericsson was originally set to lay off 10 employees in September and if the 50 employees who received the forceful e-mail are included, the company has tried to eliminate about 60 employees, the labor union said.
"It is shocking that a multinational company based in Sweden where social welfare and laborer's right are well protected, commits illegal layoffs in Korea," the union claimed.
It said Ericsson Korea still has room to do business in a variety of fields in the Korean market despite the failures to win the 3G equipment bidding.
Ericsson Korea, established in 1982, is a major telecom equipment maker in the domestic market, with its major items ranging from backbone network gear to Bluetooth to 3G handset production technologies.
Korea is leading the world in CDMA-based 3G services, known as cdma2000 1x. Recently, KTF and SK Telecom launched an upgrade of cdma200 1x, the so-called EV-DO service, which jacks up the data transmission speed to 2.4Mbps under ideal conditions.
The Korean government is taking steps to ensure that both cdma2000 and W-CDMA 3G services flourish here in a way that helps major handset, system manufacturers and carriers make inroads into overseas markets.
(insight@koreaherald.co.kr)
2002.06.21
koreaherald.co.kr |
