Swedish network biz Ericsson chops 1,400 jobs at home
More to come in other country ops? Company talks of admins 'sweating assets' and slowdown in 5G network builds
Swedish networking kit maker Ericsson is laying off 1,400 employees in its home nation amid wider efforts to reduce expenses, and ahead of a deeper round of redundancies in other countries expected in the coming days.
The job losses are part of previously announced efforts to speed up "cost improvements" with an SEK 9 billion ($870 million) reduction earmarked for the end of 2023, of which 70 percent is to come from cost of goods sold and the remainder from sales, general and admin expenses.
"The negotiations with the Swedish unions are now closed and have reached agreement regarding ways of working for headcount reductions in Sweden," a spokesperson at Ericsson told The Register.
"Our intention is to handle the employee reductions through a voluntary program. The proposed reduction will affect approximately 1,400 positions in Sweden," the Ericsson mouthpiece added.
This equates to circa 10 percent of the Swedish workforce. The cost saving plan also includes a "reduction of consultants, streamlining of processes, reduced facilities, etc."
For calendar Q4, Ericsson reported a 34 percent plunge in profits as customers reined in 5G network spending to wait and see how the economy shapes up.
Execs said in January they expect enterprise network operators to "continue to sweat assets" in the near-term, with CEO Börje Ekholm saying it was still at the "early phase of global 5G rollout" in the enterprise, where Ericsson is trying to grow.
The CEO said in an earnings call, "we expect and plan for overall mobile networks market to be flattish in the next few years."
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Ericsson expects 2023 to be "rather choppy with near-term uncertainties and macroeconomic headwinds that will likely impact operator capex. So, as expected, during Q4, we've seen some operators slowing the pace on network investments. And that includes front-runner customers in many markets," added Ekholm.
"We expect operators to continue to sweat the asset in response to the macroeconomic headwinds."
The plan for the year is to break even in terms of operating profit, the exec said on the call.
According to some sources, thousands more roles could be vaporized by Ericsson later this or early next in other country operations. It employs around 100,000 people worldwide. We asked the company to comment on this but it has yet to do so. ®