Ericsson Plans To Lay Off 8,500 Staff Worldwide To Reduce Expenses

Swedish 5G networks maker Ericsson plans to lay off 8,500 staff worldwide to reduce expenses.

The bulk of the 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. The cuts are the equivalent of 8 per cent of its workforce and part of a plan laid out to cut $865 million in costs by the end of 2023 as demand slows in some markets, including North America.

“We see a potential to simplify and become more efficient throughout the company, especially when it comes to structural costs,” Ericsson said on Friday.

Ericsson’s move would be the largest layoff to hit the telecoms industry.

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

While Ericsson did not disclose 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.”

Many telecom companies had beefed up their inventories during the height of the pandemic which is now leading to slowing orders for telecom equipment makers.

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

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)