Ericsson Announces Layoffs Amid Slowed 5G Demand

Key Takeaway

• Ericsson to lay off 1,200 employees in Sweden as part of a global cost-cutting strategy due to slowed 5G demand.
• The layoffs are amid over 260,000 job cuts in the tech sector in 2023, including major firms like Alphabet and Amazon.
• Ericsson's workforce reduction aligns with its efforts to enhance efficiency and maintain competitiveness in the telecom industry.

Ericsson Announces Layoffs

Ericsson, a leading telecom company, has disclosed plans to lay off approximately 1,200 employees in Sweden. This decision is part of a comprehensive cost-cutting strategy aimed at addressing the slowed demand for its 5G equipment. The company emphasized that these layoffs are a continuation of efforts to enhance efficiency across its operations. In the previous year, Ericsson undertook significant downsizing, eliminating 8,500 positions, which constituted about 8% of its global workforce. The current layoffs are a component of broader initiatives that include the reduction of consultancy services, streamlining processes, and minimizing facility costs. Ericsson has initiated negotiations with unions concerning the planned layoffs.

Industry-Wide Job Cuts

The announcement from Ericsson comes amid a broader trend of job reductions across the technology sector. Recent data from Layoffs.fyi indicates that over 50,000 workers have been dismissed from more than 200 tech companies since the beginning of the year. The year 2023 has seen over 260,000 layoffs from nearly 1,200 tech companies, highlighting a significant shift in the industry's employment landscape. Major technology corporations such as Alphabet, Amazon, Meta, and Microsoft have also announced job cuts, alongside other notable firms like Cisco, DocuSign, Snap, and Zoom. These companies are seeking to enhance profitability through more focused expenditure and the adoption of efficiency-enhancing technologies, including artificial intelligence.

Ericsson's Operational Footprint

At the end of the last year, Ericsson reported a total workforce of 99,950 employees, with 10,744 of those based in North America, as per an SEC filing. The company's decision to reduce its workforce in Sweden is reflective of its global strategy to navigate the current economic challenges facing the tech industry. By streamlining its operations and reducing costs, Ericsson aims to maintain its competitive edge in the rapidly evolving telecommunications sector, particularly in the development and deployment of 5G technology.

Management Quotes

• Ericsson:

  "The cost saving initiatives cover various areas such as reduction of consultants, streamlining of processes, and reduced facilities."