Ericsson officials said the move was part of a global reduction in research and development over the last 18 months. The move is expected to cost up to 450 staff in Melbourne and Sydney their jobs over the next six to nine months.
Ericsson's decision follows denials that the lab's future was being reconsidered. Responding to queries from ZDNet in August, an Ericsson spokeswoman issued an e-mail stating "I can confirm that Ericsson's research and development lab in Australia (Ericsson AsiaPacificLab) is not closing.
"We are fully committed to research and development both locally and globally".
Barry Borzillo, Ericsson Australia's managing director and chairman of AsiaPacificLab, described the decision in a statement as "very disappointing" and one which had "not [been taken lightly]".
The lab's managing director, Ric Clark, said "naturally our staff are extremely disappointed, but we will refocus to complete our current assignments and transfer our responsibilities with the competence and professionalism that has been the hallmark of the organisation for over 20 years.
"It is a sad day for research and development in Australia with no upside except that the local industry will have access now to some of the finest communications and software engineers in the world as AsiaPacificLab completes its assignments," Clark concluded.
The Victorian government also said the decision was unwelcome. "It's a global contraction of the company... [but] the job losses in Victoria are disappointing," said a spokesperson for the Minister for Information and Communication Technology, Marsha Thomson. "The Victorian ICT jobs market has weathered the storm better than other places, but we're not immune to the effects of the global economy," he added. "The announcement is not a reflection on the Victorian ICT industry."
Ericsson said its AsiaPacificLab had secured over 75 patents on core switch and signaling technology, including the call queuing system, the basis of call centre technology. The company said the lab specialized in global platform, signalling and service layer products that are integrated into global product offerings; "therefore, the closure does not impact local customers".
Stephen Withers contributed to this report
It's not Sydney nor Melbourne that is closing. It's Perth. The projects that Perth have are being moved to Melbourne, but the Perth people are being asked to train the Melbourne people before they leave the company. To that I laugh heartily. Oh, and no, I don't work for Ericsson.