Ericsson has initiated union negotiations to close down its telecom cables operation within business unit Networks.
The company says a decline in the market for copper cable and increase in demand for for fiber cable over the last years, the production has shifted towards Asia, where the majority of the business volumes for fiber cable are found. In Europe there is more production than demand for both copper and fiber cables.
Tomas Qvist, head of Special Products in business unit Networks, and head of Human Resources for Ericsson in Sweden, says: "It is a tough message to bring to our colleagues in the telecom cable operations in Hudiksvall and Stockholm today. The decision is based on the fact that Ericsson's production of telecom cables is small from a global perspective, and that we also have a small market share. There is overproduction on the cable market in Europe. Unfortunately, our production has not been operating at full capacity for a long time and has struggled with profitability."
The announcement primarily impacts the operations in Hudiksvall and Stockholm. A notice of reduction of 318 positions in Hudiksvall is given, and a dialog with the unions in Stockholm for how to close down 36 positions in Stockholm is initiated.
In February 2012 opened a new fiber optics cable duct production facility in New Zealand. When asked about the impact on this recently opened operation, a spokesperson for Ericsson said "The New Zealand fibre ducting facility will continue as planned and we will continue with our commitment to our New Zealand customers. This announcement relates to a Swedish-based plant supplying the European market. "