The headcount reduction is expected to affect less than 10 percent of Ericsson's North American staff who deal directly with customers: Those staff number about 10,000, about two-thirds of the vendor's 15,000 employees in the region.
The official Ericsson line on the cuts, which are not being replicated in other geographic regions, is thus:
- We are constantly examining our workforce needs to ensure that we have the best people with the right competencies in the right places to meet the demands of our customers. This is a process we have always done, and will continue to do, on an ongoing basis. As a company we do everything possible to ensure that we meet the demands of our business while also trying to limit the impact on our employees. However, the result of this review will result in some reductions on our North American workforce.
Ericsson ended 2011 with 104,525 staff globally but added an extra 2,600 (the majority of which are based in North America) when it closed the acquisition of Telcordia in January. No Telcordia staff are affected by this process. (See Euronews: Ericsson Seals Telcordia Deal.)
Ericsson reported a 12 percent increase in revenues and net income in 2011 to 226.9 billion Swedish kronor (US$33.4 billion) and SEK12.6 billion ($1.86 billion) respectively, but did feel some margin pressure in the final quarter of last year. (See Ericsson Suffers Margin Crunch.)
Rival Nokia Networks is in the early stages of a mass headcount reduction while Alcatel-Lucent (NYSE: ALU) is expected to announce job cuts in the coming months. (See NSN to Cut 17,000 Staff and Euronews: AlcaLu Job Cuts on the Cards?)
— Ray Le Maistre, International Managing Editor, Light Reading