Workers will be laid off at the company's offices in Stockholm, Katrineholm, Borås, Kumla, Göteborg, Linköping and Karlskrona.

Sweden's capital Stockholm will be hit the worst, with 1,125 staff being let go. 200 jobs will go in Borås, 140 in Gothenburg, 130 in Kumla, 120 in Linköping and 85 in Karlskrona. The facility in Katrineholm will shut down completely.

According to the company, negotiations with unions are underway and workers affected by the layoffs will receive notice in June.

"This hits incredibly hard at all those who work at Ericsson and have loyally worked for the company's development. It also hits all the towns affected and especially Katrineholm," the chairman of Swedish union IF Metall, Anders Ferbe, said in a statement.

"We have seen factory upon factory being dismantled in the telecom and pharmaceutical industries – which used to be the pride of Sweden. There is a risk that research and development will go down the same path if we don't act," he added.

The layoffs are part of a money saving bid to save almost 9 billion kronor ($1bn) worldwide by 2017, said the Ericsson press release.

And telecom analyst Daniel Djurberg at Swedish bank Handelsbanken told news wire TT that the decision did not come as a surprise.

"If a company has to save nine billion, you can predict that employees and consultants will have to go," he said.

The move comes amid a week of turmoil for the Swedish telecom industry, after an announcement by Sony Mobile on Monday to cut 1,000 jobs at its facility in Lund.

Chief economist Jesper Ahlgren at liberal thinktank Timbro was among those warning that the wave of layoffs may pose challenges for Sweden to compete on the world market.

"It is a concern, particularly when it involves the research intensive companies. In Sweden it's mainly a few large private companies, like Ericsson and Astra Zeneca, who put a lot of effort into research. It is difficult to see how we would be able to maintain our competitive power if they downsize," he told The Local on Wednesday morning.

"This puts a lot of pressure on the government to act. Sweden needs to get its act together. We are very dependent on big companies for research and we need to look not only at how we support them, but also at how we encourage new companies to also take up the mantle," he added.

Ericsson CEO Hans Vestberg said the decision was inevitable and added more cutbacks are to be expected around the world.

"The view people ought to take of Ericsson is that we consolidate our position as world leaders in all the areas we work in. Unfortunately that also means a constant streamlining process," he told news wire TT.

Sweden's Enterprise Minister Mikael Damberg was told of the layoffs on Tuesday evening.

"I have appointed a group of secretaries of state from five ministries to co-ordinate the government offices' work on this issue, to stay in touch with local and regional actors and to ensure that the government offices are ready to act," he told TT.