Ericsson is to close a site in the UK with the loss of 700 jobs under cost reduction plans, the Swedish telecoms giant announced today.

The firm said it will withdraw its research and development and global service delivery activities from Coventry by the middle of next year.

The company said the move was part of its “ongoing global cost reduction activities” and were subject to consultations with trade unions and employee forums.

Mats Granryd, head of market unit North Western Europe at Ericsson, said: “These proposals represent sad news we have for our employees in Ansty Park, Coventry.

“We have to work continuously to increase efficiency and lower our cost base whilst ensuring we deliver solutions designed to meet our global customers’ needs.”

Unite condemned the announcement, which it said had come as a shock to workers, as the site was opened only in May.

National officer Peter Skyte said: “This has come as a bolt out of the blue for the workforce and their families, who were looking forward to a promising future in this newly-opened site.

“The former Marconi entity acquired by Ericsson a few years ago was among the top 10 investors in research and development (R&D) in the UK and successive governments have maintained the illusion that the country of ownership of a company is immaterial.

“But this decision to close the Coventry site and withdraw its R&D work from the UK now shatters this illusion, throws highly-skilled workers out of work, and robs the UK of key technological development vital for its future.”

Unite said it would resist the proposals.

The Coventry workers handle global research and development for part of Ericsson's network infrastructure business.

The firm said it intended to move R&D of current products and global services to countries where there were already “significant scale and product synergies”, while new product R&D will switch to lower cost-base countries.

Ericsson said it was likely that the Coventry site would no longer be viable for its purposes.

“This is obviously a difficult time for our Coventry based workforce,” Mr Granryd added. “It is vital that the company continues to concentrate its research and development and global services organisation to improve efficiency.”