Ericsson plans to lay off about 20 percent of its workforce in Sweden as demand of specialty wireless products weakens and competition from China's Huawei and Finland's Nokia intensifies.

Ericsson announced on Tuesday it plans to cut 1,000 positions in production, 800 in research and development, and 1,200 in other operations including sales and administration, with a total of 3,000 from its 16,000 employees in its home country, Market Watch reported.

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The job cut will primarily affect Ericsson's last remaining Swedish production plants in Boras and Kumla, where it makes its prototypes and initial series of mobile products like radio base stations.

The intended staff reduction is just its initial step to a wider restructuring plan, in which Ericsson plans to slash its global workforce of 115,000, The Wall Street Journal reported citing Jan Frykhammar, Ericsson's CEO.

"The industry we're operating in is undergoing a very fast change," Frykhammar said. "If the speed of change in the industry accelerates further, we'll need more transformation."

The blow emphasizes the extent of the challenges Ericsson faces with weakening demand for its cellphone towers and switches from phone carriers, Bloomberg reported. At the same time, it faces tough competition, with the company trying to revive its earnings growth by saving as it struggles to rival with Huawei Technology Co. and Nokia Oyj.

Meanwhile, Ericsson is eyeing on the development of faster wireless networks, called the 5G, and software-based services like the Internet of Things and cloud computing, according to The Wall Street Journal.

Ericsson noted it will recruit about 1,000 positions in research and development in Sweden over the next three years to cater technology transition, new customers, and more software development, CNBC reported.

TagsSweden, Ericsson, Ericsson telecommunications inc, lay off, job cut, Ericsson job cut