Ericsson AB announces a workforce reduction of 1,200 in Sweden due to a slowdown in spending across the mobile services industry
Ericsson AB has announced plans to reduce its workforce in Sweden by 1,200 positions due to decreased orders and cautiousness among mobile service providers. The global supplier of 5G networking gear is one of the latest companies to join the trail of layoffs season.
In a statement released on Monday, the company announced its intention to reduce costs by downsizing facilities, limiting consultant usage, and streamlining processes.
Ericsson AB also stated that it is currently in negotiations with unions regarding these measures, which amount to approximately 8.6 per cent of its Swedish workforce as of the end of 2023, as per a report by Bloomberg.
Amidst a slowdown in spending across the mobile services industry, European telecom equipment giants Ericsson and Nokia Oyj have struggled to regain momentum.
Ericsson has cautioned that its market outside of China is expected to continue declining this year. Mobile carriers are cutting back on network spending due to the challenging competitive landscape in Europe, which is impacting their return on investments. The companies are also facing barriers to adapting to the rise of 'open radio access networks.'
Earlier, Ericsson had declared its plan to reduce its workforce by 8,500 employees, which amounts to nearly 8 per cent of its total workforce. Similarly, its competitor Nokia Oyj had announced in October its intention to cut up to 14,000 jobs, equivalent to 16 per cent of its workforce.