Interesting news today as Ericsson, the telecoms company, offered a voluntary redundancy package to up to 1000 of its staff based in Sweden. The catch is that the offer is only for employees between the ages of 35 and 50. For the full details of the story, see this FT article at MSNBC.
There are a couple of very interesting dynamics here. Firstly, Ericsson is very conscious of the age structure of its workforce. It is generally appreciated that people become more risk averse and less entrepreneurial as they get older – see this Will Hutton column from The Observer for more information on that. It is an issue that has received some coverage in Western Europe, and it increasingly a matter in Japan. Edward Hugh has written an interesting post on this at Demography Matters, also linking to analysis from different industries in Finland.
Secondly, you do wonder whether the move that Ericsson has made is the right one, and what the implications for them might be. The first issue that springs to mind is: This is age discrimination! Court case! But look a little bit further south in Europe and you come across the French example, and the whole rationale for the Contrat premiÃƒÂ¨re embauche (CPE), de Villepin’s controversial labour law proposal – Wikipedia on that in FR, EN. The CPE was a terrible way to address what is nevertheless a very real problem: middle aged workers in French firms that have jobs for life, and firms not recruiting young people partially as a result of that. The issue is replicated across the EU.
The economic rationale for Ericsson’s approach seems to be a clear one. But are our societies ready to bear the consequences of inter-generational strife in order to keep our high-tech industries competitive?