Ericsson is to axe up to 700 jobs, more than 17 per cent of its UK workforce, following a planned pull-out from its research and development headquarters in Coventry.

The Swedish telecoms group has begun consultation with staff over the cuts, which form part of a SEK 10 billion (£873 million) cost reduction programme aimed at shoring up its future following a collapse in its revenue.

Ericsson has been in Coventry for four years since it acquired the bulk of Marconi, the collapsed British telecom equipment maker.

Work at the site will move to countries where there are already "significant scale and product synergies," said Ericsson, while new research and development will switch to countries with a lower cost base.

In a statement, the company said that the announcement "is part of Ericsson's ongoing global cost reduction activities and is subject to consultations with trade unions and employee forums."

It added that "this is obviously a difficult time for our Coventry based workforce."

Ericsson recently revealed third quarter revenue fell 6 per cent while profit plunged 74 per cent.

The group blamed the unexpectedly poor performance on a slowdown in emerging markets and a decline in the pace of new orders although it also argued that analysts had been over-optimistic with expectations.

The company employs a total 4,000 people across the UK, 850 of them at its Coventry Ansty Park site.

The cuts are the latest in a series of culls at telecoms businesses as they struggle to weather the recession. In May, BT confirmed plans to cut a further 15,000 jobs this year - nearly 10 per cent of its workforce.

It had already reduced its headcount by 15,000.

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