Ericsson (ERIC, Financial) has revealed plans to lay off approximately 1,200 employees in Sweden. This move comes as part of the company's previously announced cost-cutting efforts, driven by a challenging mobile networks market and anticipated lower volumes in 2024. The telecom giant cited the slowdown in 5G equipment demand by telecom providers as a key factor behind the decision.
After experiencing a surge in demand for 5G equipment over the past few years, telecom providers have reduced their buying pace. This slowdown has forced companies like Ericsson and Nokia to implement significant layoffs as a strategy to mitigate costs.
Ericsson has expressed its expectations for a challenging mobile networks market in 2024, with further volume contraction anticipated. The company highlighted customers' cautious stance as a contributing factor to the market's challenges. Despite the expected downturn, Ericsson is committed to continuing its operational efficiency initiatives throughout 2024, although no separate statements regarding these initiatives will be made.
The company has initiated negotiations with unions regarding the layoffs. Ericsson had previously indicated in January to Reuters the possibility of further cost reductions, including layoffs, though no specific numbers were provided at that time.
