Swedish telecoms maker, Ericsson, trying to restore investor confidence after a profit warning last month, said yesterday it would cut staff by about 11 per cent or more than 11,000 people over two years. The implications for the group's 900 Irish staff are unclear, although IDA Ireland says that it is hopeful that the Irish operations will not be adversely affected.
Rapid technological development and new work methods which were less labour-intensive meant that fewer staff were needed worldwide within the group, it said. In Ireland, the company has facilities at Athlone, Co Westmeath; Clonskeagh and Dun Laoghaire in Co Dublin.
An IDA Ireland spokesman said most of Ericsson's operations here are in the area of software development, whereas a significant portion of the cuts worldwide are likely to be in the area of manufacturing. He said the IDA had been in contact with the company and would be monitoring developments.
A spokeswoman for Ericsson Ireland refused to comment on potential job losses there might be in the Republic. However, a spokeswoman in Stockholm said the Irish operation would be examined "like all the others", but it was too early to say where the job cuts will be made.
Ericsson, which had signalled last month job cuts of about this size, said costs for the programme would be booked throughout the period, at the end of which the cuts would yield their full savings of nearly three billion crowns annually.
The move shows Ericsson turning away from traditional fixed telephone networks, where demand is declining, to focus on expanding markets such as mobile phones and wireless communications involving the Internet.
"These measures are future-oriented and comply with our strategy to become a leading supplier of future telecom solutions," Ericsson chief executive Mr SvenChrister Nilsson said in a statement.
In December, Ericsson said fourth-quarter earnings would be 15-20 per cent below expectations and 1999 results would fail to meet a long-term target of over 20 per cent sales growth.
The warning wiped one fifth off Ericsson shares in two days and hit technology stocks across Europe.
