Ericsson has announced that it intends to withdraw its UK based research and development and global service delivery activities from Coventry.
Some 700 employees are expected to be affected by the proposed withdrawal which is expected to be implemented by mid 2010. This announcement is part of Ericsson’s ongoing global cost reduction activities and are subject to consultations with trade unions and employee forums. Staff have been informed.
“These proposals represent sad news we have for our employees in Ansty Park, Coventry, today,” said Mats Granryd, Head of Market Unit North Western Europe at Ericsson. “We have to work continuously to increase efficiency and lower our cost base whilst ensuring we deliver solutions designed to meet our global customers’ needs.”
The proposed changes do not affect Ericsson’s local customer activities in the UK where growth in services has been significant over the past 3 years particularly in managed services.
In January, 2009, Ericsson announced global plans to reduce cost by SEK 10 b. from the second half of 2010. This will be achieved by leveraging synergies between Ericsson’s different technologies, in-house and acquired, and by taking advantage of opportunities in the transformation to all-IP. The actions also include a reduction of the number of technology platforms and increased re-use of software components. This efficiency work is resulting in a concentration of the number of R&D sites worldwide.
The Coventry based employees handle global R&D for part of Ericsson’s network infrastructure portfolio and the global service delivery center provides services across a number of products. Ericsson intends to move R&D of current products and global services, currently based in Coventry, to countries where there are already significant scale and product synergies. New product R&D is planned to move to lower cost-base countries.
Ericsson will now enter into consultation with both union and employees representatives. Due to the proposed withdrawal of the majority of activities based at Ansty Park, it is likely that this facility would no longer be viable for Ericsson. This will be discussed further during consultation.
“This is obviously a difficult time for our Coventry based workforce,” added Granryd. “However, it is vital that the company continues to concentrate its research and development and global services organisation to improve efficiency.”
Costs associated to this proposed consolidation of activities are included in the previously announced cost reduction activities and related charges.