Swedish telecom giant Ericsson to go on cost-cutting with layoff of 8,500 employees

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As part of its cost-cutting strategy, telecom equipment manufacturer Ericsson will layoff 8,500 workers globally, according to a memo written to staff members and seen by Reuters news agency. 

“The way headcount reductions will be managed will differ depending on the local country practice,” Chief Executive Borje Ekholm wrote in the memo. “In several countries, the headcount reductions have already been communicated this week,” he said.

This would be Ericsson’s biggest layoff in the telecom sector. Technology giants like Microsoft, Meta, and Google have fired thousands of workers due to their financial situations. The corporation, which has over 105,000 employees globally, revealed on Monday that it would eliminate 1,400 positions in Sweden. 

Ericsson did not specify which location would be most impacted. As demand weakens in several countries, particularly North America, the corporation declared in December that it will slash expenses by 9 billion crowns ($880 million) by the end of 2023.

“It is our obligation to take this cost out to remain competitive,” Ekholm said in the memo. “Our biggest enemy right now may be complacency.”

This comes more than a month after the business released lower-than-anticipated fourth-quarter results. Even in high-margin countries like the US, global sales of its 5G equipment have slowed down. 

Ericsson has made it clear that it wants to decrease costs, and that would include making significant cuts. The firm is embarking on cost-cutting initiatives, which would include decreasing consultants, real estate, and staff numbers, the company’s Chief Financial Officer Carl Mellander previously told news agency Reuters.

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With reference to the cuts, Mellander stated, “It’s different from geography to geography, some are starting now, and we’ll take it unit by unit, considering the labour laws of different countries.” 

(With inputs from agencies)

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