“Ericsson announces global layoffs of 8,500 employees to streamline operations and cut costs”
Swedish telecommunications giant Ericsson has announced plans to lay off 8,500 employees globally, citing the need to streamline its operations and cut costs. The company, which is a major player in the 5G wireless network market, has been struggling to keep up with competitors such as Huawei and Nokia, and has been hit hard by the Covid-19 pandemic.
The layoffs are part of a broader restructuring plan announced by Ericsson in 2017, which aimed to cut costs by 10 billion Swedish kronor ($1.2 billion) by 2020. The plan involved shifting the company’s focus away from its traditional business of selling network equipment to telecom operators and towards selling software and services to businesses in other industries.
The company reported a net loss of 4.9 billion
Despite making some progress in its restructuring efforts, Ericsson’s financial results have remained lackluster. The company reported a net loss of 4.9 billion Swedish kronor ($574 million) in the third quarter of 2022, due in part to a decline in sales in its Networks division, which sells network equipment to telecom operators.
In a statement announcing the layoffs, Ericsson CEO Börje Ekholm said that the company needs to “further accelerate our transformation to meet customer needs and stay ahead of competition.” He added that the company plans to reinvest the cost savings from the layoffs into research and development, as well as expanding its 5G and cloud offerings.
The layoffs are expected to affect Ericsson employees in several countries, including the United States, the United Kingdom, and Sweden. The company has not yet provided specific details about which business units or locations will be affected.
Unionen labor union called
The announcement of the layoffs has been met with criticism from labor unions and some politicians. In Sweden, the Unionen labor union called the layoffs “a brutal blow to Ericsson employees and their families.” The union has demanded that Ericsson provide “security and support” to affected employees and engage in negotiations with the union to minimize the impact of the layoffs.
Swedish politicians have also expressed concern about the layoffs, with some calling on the government to intervene to protect jobs. However, the government has indicated that it does not plan to get involved, stating that Ericsson is a private company and that its restructuring decisions are its own responsibility.
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The layoffs are expected to begin in the first quarter of 2023 and continue through 2024. Ericsson has said that it will provide support to affected employees, including severance packages and job training programs.
The announcement of the layoffs comes at a difficult time for Ericsson, as the company faces increasing competition in the 5G market. In addition to Huawei and Nokia, Ericsson also competes with companies such as Samsung and Cisco in the network equipment market. The company has been investing heavily in 5G technology in recent years, and has secured several major contracts with telecom operators around the world.
However, the Covid-19 pandemic has had a major impact on Ericsson’s business, as telecom operators have been forced to cut back on capital expenditures and delay the rollout of 5G networks. In addition, the pandemic has led to increased competition from Chinese companies such as Huawei, which have been able to continue investing in 5G technology despite the pandemic.
global 5G market to grow rapidly
Despite the challenges facing the company, Ericsson remains optimistic about its future prospects. In a recent investor presentation, the company stated that it expects the global 5G market to grow rapidly over the next few years, driven by increasing demand for high-speed wireless connectivity in a wide range of industries.
To capitalize on this growth, Ericsson has been expanding its offerings beyond network equipment and into software and services, such as cloud computing and Internet of Things (IoT) solutions. The company has also been investing heavily in research and development, with a particular focus on developing advanced 5G
