Ericsson AB, the manufacturer of 5G networking equipment, is all set to axe about 1,200 jobs in Sweden. Why? Because it is not receiving enough orders and is adopting cost-cutting measures, for which it needs to streamline operations and processes. Additionally, it expects demand to fall further outside China this year, and is not expecting significant investment levels either from operators.
With return on investment being adversely affected amidst the high competition in Europe, mobile carriers are also cutting down expenditure on networks. To add to the woes, there is the availability of open radio access networks technology, which allows carriers to conveniently use several vendors, leading to stiff competition in the network components space.
Around the same time in 2023, Ericsson had announced plans to let go 1,400 people from its then 14,500-strong workforce in Sweden. That is, about 10 per cent of the Swedish workforce. It had, at the time, assured that the entire layoff process would be carried out in a professional manner with utmost respect to the impacted staff. The plan then was to carry out the process via a voluntary programme. It had resorted to the layoffs as it had fallen short of expected earnings in Q4.
Before the announcement of these layoffs, the Company had revealed its intention to reduce costs by about $880 million by the end of 2023, amidst a global slowdown in markets, including North America.
