Ericsson to shut down cable manufacturing arm

22 May 2013 |

Ericsson has announced that it is in union discussions to close down its cable manufacturing operation.

In a statement, the company said that Europe has suffered from overproduction of both copper and fibre cables, as copper cable demand has decreased over the years, and fibre cable production has shifted to Asia.

Hudiksvall and Stockholm in Sweden are expected to be among the hardest hit by the closure of the unit, with an expected loss of 318 jobs.

“It is a tough message to bring to our colleagues in the telecom cable operations in Hudiksvall and Stockholm,” said Tomas Qvist, head of special products in business unit networks, and head of HR for Sweden, at Ericsson.

“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. Unfortunately, our production has not been operating at full capacity for a long time and has struggled with profitability.”

Net profit for Ericsson’s cable operations in 2012 were said to amount to approximately SEK 1 billion.

Negotiations are expected to be finalised during Q3 of this year, and the company said that no termination notices will be issued before August.