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Ericsson to cut 1,200 jobs in Sweden due to tough market conditions in 2024

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In Short:

Ericsson is cutting 1,200 jobs in Sweden to save costs due to slow mobile networks market. The company is negotiating with unions to reduce headcount, streamline processes, and cut costs in several areas. Despite challenges, Ericsson remains focused on growth and technology leadership. CEO Borje Ekholm expects market recovery in the future, driven by increasing mobile data usage and new opportunities. The company aims to continue cost-saving measures throughout 2024.

Ericsson to Lay Off 1,200 Employees in Sweden

Ericsson, a Swedish gear maker, is set to reduce its workforce by 1,200 employees in its home country as part of a cost-cutting measure. The company anticipates a challenging mobile networks market in 2024, leading to a decline in volume as customers adopt a cautious approach.

Cost Reduction Initiatives

According to a statement released by Ericsson, the staff reductions are part of a global strategy to enhance cost efficiency while maintaining essential investments for the company’s technological advancement. The company is also in discussions with employee unions regarding the proposed layoffs.

Aside from the workforce reduction, Ericsson is focusing on various cost-saving initiatives including the reduction of consultants, streamlining of processes, and optimizing facilities.

Future Growth Strategy

Despite the workforce reduction, Ericsson reaffirmed its commitment to achieving a higher growth trajectory and long-term margin targets. The company aims to lead in mobile networks and expand into enterprise solutions to drive future growth.

Market Challenges and Recovery

Borje Ekholm, President and CEO of Ericsson, acknowledged the challenges in the radio access network market and projected a further decline in volumes for 2024. However, the company remains optimistic about the market’s recovery, driven by the growth in mobile data usage and new monetization opportunities.

Ericsson also highlighted its strategic partnership with AT&T to deploy a commercial open RAN network in the United States, as part of its efforts to position itself for future market opportunities.

Previous Cost Reduction Efforts

Ericsson had initiated cost-cutting measures in 2022 and achieved significant savings by the end of 2023. With a focus on operational efficiency, the company plans to continue reducing costs in 2024 to improve its competitiveness.

Industry-wide Impact

In early 2023, Ericsson announced a reduction of 8% of its workforce, amounting to approximately 8,500 jobs, as part of its cost-saving strategy. The company’s competitor, Nokia, also revealed plans to cut 14,000 jobs, reflecting the evolving landscape of the telecommunications industry.

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