Ericsson is cutting back on its workforce in North America, where it currently employs more than 14,000 people.
The layoffs will hit “less than 10 percent” of its employees across all of its groups, a spokeswoman said, but she did not confirm reports in The Kansas City Star that the company was targeting its lowest-performing employees.
“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,” the spokeswoman said.
Ericsson’s most recent review of its operations “will result in some reductions on our North American workforce,” she said. The Swedish infrastructure vendor runs Sprint’s wireless network under a $5 billion outsourcing deal the companies forged in 2009, which transferred 6,000 employees to Ericsson. Clearwire signed a similar outsourcing deal with Ericsson last year.
The Kansas City Star said Ericsson would cut 130 jobs in the Kansas City area, Sprint’s home state and the location of about 2,000 employees from the network outsourcing deal. The workforce reductions will not affect Ericsson’s ability to operate Sprint’s network, an Ericsson executive told the paper.
The company’s North American CDMA business, acquired from Nortel in 2010, has been under pressure as CDMA operators Verizon and Sprint moved to LTE and decided to limit future investments in legacy 3G networks. A slowdown in operator spending during the second half of last year contributed to a 65 percent drop in its fourth-quarter profits.
