Ericsson to close major research centre in Nanjing amid shrinking 5G market share in China

The Swedish telecoms giant confirms it will divest its product research and development activities in Nanjing by November

Foreign telecoms equipment suppliers have been ceding 5G market share to domestic rivals in the Chinese market

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An Ericsson sign is seen at the third China International Import Expo (CIIE) in Shanghai, China, on November 5, 2020. Photo: Reuters

Published: 9:00pm, 9 Sep 2021Updated: 10:54pm, 9 Sep 2021

Swedish telecommunications giant Ericsson will shut down one of its five research centres in China, with plans to transfer 630 redundant employees to a partner, according to two people familiar with the matter, as the company rapidly loses share to domestic players such as Huawei Technologies Co in China’s 5G market.

One source, who declined to be named as he is not authorised to speak to media, said that employees at the centre in the eastern city of Nanjing, established in 2001, have received a proposal for them to move to TietoEVRY, a Finnish software provider with offices in China.

TietoEVRY has agreed to match the pay of Ericsson employees affected by this arrangement, the source said, while those who decline the offer will receive a severance package.

Ericsson’s 5G factory in Nanjing, meant as a showcase of its 5G prowess, will not be impacted, a second source said.

In an email statement to the Post on Thursday, Ericsson confirmed that it will divest its product research and development activities in Nanjing to TietoEVRY effective November 1, 2021. All affected employees will be offered employment with TietoEVRY, it said.

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