Ericsson outsources software development to TietoEnator


Ericsson outsources software development to TietoEnator

Scandinavian computing firm Ericsson has sold part of its software development operations to TietoEnator.

As part of the 500 million kronor (£34m) deal, about 860 employees in four Swedish cities working mainly on software development for second-generation mobile telecommunication networks will transfer to TietoEnator.

The Ericsson employees will form a new unit within TietoEnator Telecom & Media in Sweden. The IT services company expects about €90m (£56m) in orders per year for the unit coming from Ericsson and other customers.

Last year Ericsson rival Nokia outsourced part of its research and development for mobile networks to TietoEnator.

Ericsson has already divested several units and then signed customer agreements with the buyers. The company is negotiating a contract to outsource its entire IT operations, which involves 4,000 people worldwide. A deal is expected to be announced in November.

On Wednesday (25 September), Ericsson sold its Norwegian GPRS research and development unit to Teleca and became a Teleca customer.

Earlier this year Ericsson Microelectronics was sold to Infineon Technologies and the Munich chip maker became one of Ericsson's main suppliers.

Ericsson has been struggling to stay afloat as demand from telecommunications companies has plunged. Last year the company cut over 22,000 jobs and in April announced 20,000 job cuts for this year.

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