Ericsson To Lay Off 8,500 Employees Globally To Cut Expenses

In a latest job cut announcement, Swedish 5G networks maker Ericsson said the company plans to lay off 8,500 staff globally to cut expenses. Most of the job cuts will take place during the first half of the year, but some will only take place in 2024, the company said in an email, reported news agency Reuters.

The cuts will affect 8 percent of its workforce and the decision has been taken under its plan to cut $865 million in costs by the end of 2023 as demand slows in some markets, including North America.

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“We see a potential to simplify and become more efficient throughout the company, especially when it comes to structural costs,” Ericsson said on Friday. The company’s layoff would be the largest to hit the telecoms industry.

“The way headcount reductions will be managed will differ depending on the local country practice,” said Chief Executive Borje Ekholm. “In several countries, the headcount reductions have already been communicated this week,” he said.

The company didn’t share any details on which geography would be most affected, analysts had predicted that North America would likely be most affected and growing markets such as India the least. “It is our obligation to take this cost out to remain competitive,” Ekholm said. “Our biggest enemy right now may be complacency.”

At the peak of the pandemic, many telecom companies beefed up their inventories which is now leading to slowing orders for telecom equipment makers.

Ericsson Chief Financial Officer Carl Mellander had earlier told the agency that cost cuts would involve reducing consultants, real estate and employee headcount.

After Meta Platforms Inc announced last year it would let go of 13 percent of its workforce, the company is said to plan another fresh round of job cuts in a bid to reorganize and downsize. The fresh layoffs could affect thousands of employees, citing a report by the Washington Post, news agency Reuters reported on Wednesday.

On the other hand, Elon Musk is still laying off Twitter employees as dozens of workers across sales and engineering departments were laid off last week, including one of Musk’s direct reporting executives, who was managing engineering for Twitter’s ads business. It means that the new Twitter CEO has done at least three rounds of layoffs, according to news reports.