Ericsson pulls plug on 8,500 workers

At least we know who isn't going to suffer Stockholm syndrome

Updated Ericsson is planning to cut 8,500 workers, or about eight percent of its 105,000-strong workforce.

The layoffs are said to be coming worldwide mostly in the first half of this year, and some possibly into the next.

"The way headcount reductions will be managed will differ depending on local country practice," CEO Borje Ekholm wrote in a memo to staff Friday, which was first reported by Reuters.

"In several countries the headcount reductions have already been communicated this week."

These layoffs include the 1,400 jobs the Stockholm-based biz on Monday said it would ditch in Sweden. We're told this is all part of a roughly $900 million cost-slashing drive for the year, which was announced at an investor day in December.

The maker of 5G telecoms gear earlier said it experienced a slowdown in demand for its next-gen stuff in North America – where it employs 12,000 people – and other regions. Its spending cuts are expected to make an impact on the business's finances as early as next quarter.

"It is our obligation to take this cost out to remain competitive," Ekholm added in his missive. "Our biggest enemy right now may be complacency."

Ericsson's annual profit [PDF] slid to $1.8 billion in 2022, down 17 percent from the previous year. Sales reached $26 billion, up 17 percent.

As far as we can tell, it did not go on a wild hiring spree, substantially growing its ranks, during the pandemic like other corporations did. So far this year, more than 400 technology companies have laid off at least 110,000 employees, according to layoffs.fyi.

We've asked Ericsson for further comment. ®

Updated to add

A spokesperson for Ericsson has been in touch to confirm a bunch of details. Here's the key part of their statement:

We see potential to simplify and become more efficient across the company, especially in structural costs. But we are also working on our service delivery, supply, real estate and IT. We have already started to implement and accelerate various initiatives to help us reach this target.

It will, however, unfortunately also result in a need to address headcount. We believe a total of 8,500 positions will be affected. The main part will be during H1 2023 but it also includes 2024. The way headcount reductions will be managed will differ depending on local country practice.