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WorldRussiaSwedish company Ericsson to exit Russia, cut staff this year

Swedish telecom equipment maker Ericsson is planning to finalize its Moscow exit and cut staff this year, showing further problems for Russian network coverage upkeep.

Ericsson’s headquarters in Stockholm talked to its Russian unit last week that it will shut down and employees will be fired by the end of 2022, as per reports, mentioning unnamed telecom industry sources. Ericsson employs 565 people in Russia, as per corporate data.

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The company vowed financial & social support to outgoing staff, the reports added, and said it will complete the phaseout in the coming months “as it fulfils its obligations to customers.”

At least two top Russian mobile operators, MTS and Tele2, had major contracts with Ericsson before Russia invaded Ukraine. Ericsson’s share of the Moscow telecom equipment market is estimated at around 20%.

Russian mobile operators are now facing a shortage of equipment for Ericsson’s base stations, which are no longer available under warranty, and the discontinuation of tech support for Ericsson software, the reports stated, citing Russia’s state-owned defence and technology conglomerate Rostec.

Meanwhile, experts said that Ericsson could either create a separate legal entity for tech support, or Russian mobile operators could hire its outgoing staff to maintain equipment.

At the same time, Ericsson has completely shut down its Russian business and put employees on paid leave in April over Russia’s invasion of Ukraine. Its Finnish rival Nokia pulled out of the Russian market the same month, while Chinese telecom giant Huawei temporarily shut down new orders and furloughed Russian staff in fear of secondary sanctions.

The three companies account for nearly three-quarters of the global base station market.

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