Ericsson closes Swedish plant, announces layoffs

Wireless equipment manufacturer Ericsson said Monday it plans to close a production and design facility in Nynaeshamn, Sweden, resulting in the layoff of 393 workers.

The Nynaeshamn factory currently employs 463 workers--70 of whom will be transferred to facilities in central Sweden--and produces base stations for wireless networks. Ericsson cited its development of new technologies as the catalyst behind the plant’s closing: “Because the components are getting more advanced and fewer, the work content has decreased,” Jan Wassenius, head of production at Ericsson, told the Associated Press.

Ericsson has roughly halved its workforce since reaching a peak of 100,000 employees in 2001, currently employing about 51.500 workers across the globe.

The layoffs come a few weeks after the company posted fourth-quarter and full-year profits, enjoying sales increases in all of its markets except North America. For the fourth quarter of 2004, Ericsson earned 6 billion kronor ($847 million U.S.)--0.38 kronor a share--compared with Q4 2003 earnings of 142 million kronor, or 0.01 kronor a share. Sales grew nearly 9% to 39.4 billion kronor ($5.5 billion) from 36.2 billion kronor the year before.

For the year, Ericsson posted a net profit of 19 billion kronor ($2.7 billion), or 1.20 kronor a share; a year ago, the company suffered losses of 10.8 billion kronor, or 0.69 kronor a share. Annual revenue climbed to 131.9 billion kronor ($18.6 billion) from 117.7 billion kronor in 2003.