Less than a year after Ericsson opened its $1.3 billion facility in Vaudreuil-Dorion, Que. the company is closing its doors.
This comes after disappointing third-quarter earnings.
A spokesperson for the telecom giant told Global News it has three global communication centres – two in Sweden and one in Vaudreuil-Dorion.
READ MORE: Ericsson plans new Montreal-area research centre
Peter Olofsson said Ericsson is struggling financially and has to cut back, so the Montreal-area facility had to go.
About 50 employees will be affected.
The company opened its state-of-the-art, 20,000 square foot facility in December 2016.
It contains massive data boxes and was supposed to help bring 20,000 engineers virtually together from around the world.
Ericsson chose Vaudreuil-Dorion for its hub in 2013 after a global search.
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They were enticed by then-Premier Pauline Marois‘ promises of millions of dollars in subsidies.
Benefits included a 10-year corporate tax holiday and cheap Hydro-Quebec rates.
The Quebec government told Global News that Ericsson must respect its financial obligations to the province, and may have to repay all of its loans.
The closure is also a blow to the Vaudreuil-Dorion region.
READ MORE: Ericsson to take $1.2B hit in fourth quarter for loss-making semiconductor venture
Mayor Guy Pilon said he had high hopes for the company because it brought taxes and prestige to the area.
“I’m very, very much disappointed with that because, you know, it’s brand new,” Pilon said.
Olofsson told Global News Ericsson plans to honour any financial commitments with the Quebec government, and hopes to hold discussions in the next few months.
The facility is expected to close sometime in 2018.
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