Ericsson to Shed 1,200 Swedish Jobs in Bid to Slash Costs
(Bloomberg) -- Ericsson AB, one of the world’s biggest providers of 5G networking equipment, said it will cut 1,200 jobs in Sweden, reducing costs as it faces lower sales from mobile providers.
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The company also plans to cut costs separately by eliminating facilities and the use of consultants and will streamline processes, it said in a statement on Monday. The company said it’s in negotiations with unions over the cuts, which represent about 8.6% of the Swedish headcount at the end of 2023.
European telecom equipment makers Ericsson and Nokia Oyj have struggled to rebound from a slowdown in spending across the mobile services industry. Ericsson warned earlier this year that its market outside of China would continue to decline in 2024 with investment by many operators remaining at “unsustainably low” levels.
Read More: Ericsson Sees Weak 2024 Demand as Investment ‘Unsustainably Low’
Mobile carriers are lowering network spending and have complained that the competitive environment in Europe is hurting return on investments. Nokia and Ericsson must also contend with the emergence of “open radio access networks,” a technology that will let carriers more easily use multiple vendors and will open up competition for network parts.
About a year ago, Ericsson announced that it would cut 8,500 staff, or about 8% of its total workforce. Rival Nokia Oyj said in October it would cut as many as 14,000 jobs, or 16% of its workforce.
Ericsson shares fell 0.8% to 56.97 Swedish kronor at 1:08 p.m. in Stockholm. The shares have declined 9.9% this year.
(Updates with additional background on job cuts and market from third paragraph)
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