It seems that another job cut is on horizon as one of the world’s biggest providers of 5G networking equipment, Ericsson AB, said it will cut 1,200 jobs in Sweden.
Ericsson Job Cuts In Europe
The move is on the backdrop of the lower orders and caution from mobile service providers.
Besides this, the communication equipment manufacturer plans to cut costs separately by reducing facilities.
The company will also make use of consultants and will streamline processes, as per its statement on Monday.
In the meantime, the company seems to be in negotiations with unions over the cuts.
This represents about 8.6% of the Swedish headcount at the end of 2023.
It appears that the European telecom equipment makers including Ericsson and Nokia Oyj have struggled to rebound from a slowdown in spending across the mobile services industry.
Telecom Equipment Makers Struggling To Handle The Intense Competition
At the start of this year, Ericsson warned that its market outside of China would continue to decline in 2024 due to the fact that the investment by many operators remained at “unsustainably low” levels.
Mobile carriers in Europe are scaling down their network spending amid concerns about the impact of intense competition on their return on investments.
In addition to this, the emergence of “open radio access networks”, a technology that will let carriers more easily use multiple vendors will open up competition for network parts for Nokia and Ericsson.
Prior to this, Ericsson announced that it would cut 8,500 staff, or about 8% of its total workforce about a year ago.
During October, Rival Nokia Oyj said it would cut as many as 14,000 jobs, or 16% of its workforce.
Considering the news, Ericsson shares fell 0.8% to 56.97 Swedish kronor at 1:08 p.m. in Stockholm.
This year, its shares have declined by 9.9%.
