Ericsson Could Cut 8,500 Jobs Under Cost-Cutting Plans, Reveals Internal Memo

Telecom tools maker Ericsson will lay off 8,500 staff globally as a part of its plan to chop prices, a memo despatched to staff and seen by Reuters stated.

While know-how firms akin to Microsoft, Meta and Alphabet have laid off hundreds of staff citing financial situations, Ericsson‘s transfer could be the biggest layoff to hit the trade.

“The way headcount reductions will be managed will differ depending on local country practice,” Chief Executive Borje Ekholm wrote within the memo.

“In several countries the headcount reductions have already been communicated this week,” he stated.

On Monday, the corporate, which employs greater than 1,05,000 worldwide, introduced plans to chop about 1,400 jobs in Sweden.

While Ericsson didn’t disclose which geography could be most affected, analysts had predicted that North America would seemingly be most affected and rising markets akin to India the least.

The firm stated in December it will reduce prices by 9 billion crowns ($880 million or almost 7,300 crore) by the tip of 2023 as demand slows in some markets, together with North America.

“It is our obligation to take this cost out to remain competitive,” Ekholm stated within the memo. “Our biggest enemy right now may be complacency.”

Many telecom firms had beefed up their inventories in the course of the top of the pandemic which is now resulting in slowing orders for telecom tools makers.

Verizon, one of many largest telecom firms, plans to spend between $18.25 billion (almost Rs. 151,400 crore) and $19.25 billion (almost Rs. 1,59,700 crore) this 12 months, down from a capital expenditure price range of $23 billion final 12 months.

Ericsson Chief Financial Officer Carl Mellander had earlier advised Reuters that price cuts would contain lowering consultants, actual property and worker headcount.

Nordic rival Nokia has not introduced any plans to put off staff.

© Thomson Reuters 2023