Ericsson is laying off in Sweden
One of the largest manufacturers of 5G networking gear worldwide, Ericsson AB, announced that it will lay off 1,200 employees in Sweden in order to deal with a decline in orders and caution from mobile service providers.
According to a statement released by the corporation on Monday, it also intends to reduce expenses independently by streamlining procedures, cutting back on buildings, and hiring fewer consultants.
The corporation stated that it is in talks with unions regarding the layoffs, which at the end of 2023 will account for roughly 8.6% of all Swedish employees.
The European manufacturers of telecom equipment, Nokia Oyj and Ericsson, have found it difficult to recover from a downturn in expenditure in the mobile services sector.
Earlier this year, Ericsson issued a warning, stating that the company's market outside of China will continue to contract in 2024 and that many operators' investment levels would stay "unsustainably low."
In response to complaints from their customers about lower return on investment due to Europe's competitive landscape, mobile operators are cutting back on network spending.
The rise of "open radio access networks," a technology that will make it easier for carriers to use various suppliers and increase competition for network components, is another issue that Nokia and Ericsson must deal with.
A year or so ago, Ericsson declared that 8,500 employees, or around 8% of its whole workforce, would be let go. In October, rival Nokia Oyj announced that it would eliminate up to 14,000 positions, or 16% of its total staff.
At 1:08 PM in Stockholm, Ericsson shares dropped 0.8% to 56.97 Swedish kronor. This year, the share price has dropped by 9.9%.
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