Ericsson, a major telecom equipment company, plans to cut approximately 1,600 jobs in Sweden. This is not the first time the company has decided to reduce its headcount. Over the past few years, Ericsson has been gradually downsizing, given the reduced spending in 5G networks and U.S. import tariffs.
Cost-Cutting Measures Adopted by Ericsson
In a statement given by the company, it said that the staff reduction proposal forms a crucial part of its global initiatives, aimed at improving cost position, while also maintaining a level of investment needed for long-term technological leadership. In line with the local labour regulations, Ericsson cannot remove the employees without notice. Consequently, it has started negotiations with the trade unions and submitted a formal notice to the Swedish Public Employment Service.
The company emphasised that these measures are intended to ensure long-term competitiveness rather than signal a withdrawal from key markets or technologies. Given the uncertain market conditions, the company decides to make some changes to generate revenue. By cutting costs, it can focus on advanced network technologies and innovation.
Weak 5G Network Demand in the Past
Ericsson has been facing weak demands for years. There persists the problem of slower revenue growth and continued pressure on profits for the company. In 2023, it came up with a global plan to cut 8,500 jobs, which accounted for approximately 8% of its workforce The move was aimed at reducing operating expenses and improving efficiency.
The company has reiterated that the purpose of this restructuring process is its long-term strategy of delivering high-performing networks that can support various services. It also announced its commitment to maintain strategic investments in advanced technologies. This reflects a broad change in the telecom sector. The companies are undergoing major restructuring by reassessing workforce levels. In order to tackle the problem of rising costs and reducedcustomer spending.
Follow The World Times for more such Business insights.
