Ericsson on cost-cutting drive; preparing for tough times: CEO

BARCELONA: The world's leading network solutions provider, Ericsson AB, today said the economic slowdown has not fully reached the telecom industry, but it is gearing up for tougher times through workforce rationalisation and technology upgradation.

Speaking on the sidelines of Mobile World Congress here, the Swedish company's worldwide CEO Carl-Henric Svanberg said that the company is planning to save 10 billion Swedish krone in the next 18 months through a cost-cutting drive, that would affect 5,000 job positions globally.

"Economic recession has not fully reached the telecom sector as yet, but we are preparing for tough times ahead," Svanberg said.

"A major cost-cutting drive has been initiated to save about 10 billion Swedish Kronor over the next 18 months and we will be rationalising our workforce, which would affect about 5,000 employees worldwide," he said.

Ericsson would cut its contracted employee strength as IT-based network would have more dependence on software and less people would be needed to manage the hardwares.

However, he did not disclose the number of contracted workers to be cut down, as also India-specific job cuts actions are being taken to safeguard the leadership position and to prepare for the tougher times.