Ericsson, the Swedish telecoms firm which employs 1,800 staff in the Republic, will shed a further 20,000 jobs over the next two years amid continuing gloom in the telecommunications sector.
The company has already made up to 200 employees redundant at its operations here over the past year as part of its global restructuring programme which resulted in 22,000 job cuts during 2001.
Yesterday, Ericsson said it would seek 10,000 job cuts this year and a further 10,000 in 2003. This would reduce the workforce to 65,000, from 107,000 last year.
The announcement came as Ericsson posted weak quarterly results, which follow the firm's first ever annual loss in 2001. The company also warned it would not return to profit until 2003.
An Ericsson spokesman said yesterday that none of the firm's worldwide operations would be excluded from the cutbacks, and efficiencies would also be sought at the firm's R&D centres.
"Ericsson's R&D functions are not exempt from this," said Mr Mads Madsen, group director of media relations. "There are opportunities for increased efficiency there too."
The Republic is one of Ericsson's key locations for R&D. It has two subsidiaries based here developing software and patents for the entire Swedish group - Ericsson Systems Enterprise and Ericsson Invention Ireland.
The group also manufacturers telecoms equipment at its Athlone site, conducts training at a dedicated centre in Dún Laoghaire, and has a treasury function based at the IFSC in Dublin.
According to the latest annual returns filed by Ericsson's Irish holding firm, the company had a bumper year to December 31st 2000 growing sales to £322 million (€409 million), from £260 million in 1999. Pre-tax profit also increased to £37 million in 2000, from £30 million the previous year.
The accounts show the firm received £4 million aid from IDA Ireland in 2000 and employed 2,039 staff.
Ericsson has been hit hard by the slump in demand for telecoms equipment during 2001.
It reported a 5.4 billion Swedish krone pre-tax loss in the period January to March against expectations of a SKr4.9 billion shortfall. Its sales were a weaker than expected SKr37 billion and orders in the first three months fell 40 per cent.
Ericsson chief executive, Mr Kurt Hellstrom, said yesterday he could not forecast a recovery for the foreseeable future, sending Ericsson shares down almost 25 per cent in early trading.
Ericsson also announced it would undertake a $2.9 million (€3.26 million) rights issue backed by its two largest shareholders AB Investor and AB Industrivarden.
Mr Hellstrom said there may be opportunities in telecoms if the firm was financially strong enough to participate in them.
