Ericsson To Lay Off 700 In Coventry, UK

STOCKHOLM (AP) — Swedish wireless equipment company LM Ericsson will close down its operations in Coventry, U.K., and lay off all 700 employees, it said Tuesday.

The company, based in Stockholm, said it has started negotiations with trade unions and expects to close down the operations by mid-2010.

The business in Coventry includes research and development activities and global service delivery ventures, which will be moved to countries where the scale of the operations and combination of products under development can create synergies, Ericsson said.

New product R&D will be moved to low-cost countries, it added.

"This is obviously a difficult time for our Coventry based workforce," Mats Granryd, Ericsson's head of market unit for northwestern Europe, said in a statement. "However, it is vital that the company continues to concentrate its research and development and global services organization to improve efficiency."

The shutdown is part of Ericsson's plans to reduce cost globally by 10 billion kronor ($1.46 billion) from the second half of 2010.

Ericsson, which has previously seen only limited effects of the global recession, earlier this month reported weak third-quarter results and said the crisis has finally reached the network market.

With around 77,000 employees worldwide, Ericsson is one of Sweden's biggest companies and has long been a key global supplier of fixed and mobile phone networks.

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