Ericsson, the mobile networks and handset manufacturer, will implement a 20 billion Swedish krona (€2.19 billion) cost-cutting plan from 2002 which will affect its Irish operations.

The firm, which employs 2,500 people in Dublin and Athlone, yesterday said it would cut thousands of jobs in Sweden and Britain and stop fresh recruitment at all its global operations. The job freeze affects Irish operations.

Last night, Mr Mads Madsen, director of corporate public relations at Ericsson, said job cuts could not be ruled out in the Republic and further information would become available in mid-April.

The scale of the cost-cutting measures at Ericsson will raise concerns for the future of a $200 million (€224 million) expansion plan announced for the Cork region last October.

IDA Ireland confirmed yesterday that negotiations for a research and development centre focusing on e-commerce activities had not yet been concluded.

Almost half of Ericsson's 2,500 employees here are engaged in R&D, about 5 per cent of the total R&D staff in the group.

Ericsson, which is one of the State's largest software houses, has operations in Clonskeagh and Dun Laoghaire in Dublin and in Athlone, Co Westmeath.

Yesterday, the equipment maker said it would stop production at two plants in Britain in the third quarter and cut 2,100 jobs from the payroll in Sweden. Further cost cutting measures will be released on April 20th.

Simultaneously with the Ericsson announcement, the world's biggest mobile phone producer Nokia said it was cutting 300-400 staff at its networks' broadband unit.