Ericsson played down a press report stating it plans to lay off around 25,000 employees outside Sweden, while separately announcing it is taking legal action against smartphone maker Wiko in Germany for patent infringements.
Layoffs
A report by Swedish daily Svenska Dagbladet stated Ericsson could lay off 25,000 of its employees outside of Sweden, as part of a cost savings program announced in July.
In it’s Q2 earnings report, Ericsson said it would accelerate its plan to reduce costs and increase efficiency by implementing a savings program. It also said it would make redundancies as part of the plans, but did not provide specifics on where the layoffs would take place or how many employees would be affected.
Instead, Ericsson said cost cutting actions would primarily target service delivery and common costs, excluding R&D expenditure, with the target of implementing annual cost savings with a run rate effect of at least SEK10 billion ($1.2 billion) by mid-2018.
The Svenska Dagbladet report said it was not clear if the planned layoffs would be in the company’s media division, which is currently the subject of a strategic internal review amid speculation the unit could be sold.
In a statement responding to the article, Ericsson repeated previous comments about the planned cost savings, adding the information is the same as it “sent to Svenska Dagbladet“.
“Ericsson has not communicated which specific units or countries that could be affected. It is too early to talk about specific measures or exclude any country,” the company stated, adding: “As Ericsson executes on these plans to save costs, the company will communicate this, and to what extent employees could be affected.”
Wiko action
In a separate announcement, Ericsson said it is suing smartphone maker Wiko for infringement of patents “essential for 2G, 3G and 4G cellular technology, as well as implementation patents.”
In a statement, the Swedish vendor said Wiko infringed on Ericsson’s IP for six years “without licence and compensation”.
Ericsson added it had tried to establish a fair, reasonable and non-discriminatory licence agreement with Wiko since 2013, and decided to take legal action as a last resort.
Gustav Brismark, chief IP officer at Ericsson, said global sharing of technology and open standards was the “force behind the smartphone revolution”, but it only worked if market players respect the basic rules.
“It is unfair for Wiko to benefit from our substantial R&D investment without paying a reasonable licence fee for our patented technology.”
