Ericsson to cut 1,200 jobs amid slowdown in 5G spending

Ericsson AB which is one of the world’s biggest providers of 5G networking equipment has announced that it will layoff 1,200 employees in Sweden. This comes as the company is trying to cope with the lower orders and caution from mobile service providers.

Cost-cutting measures

In a statement, the firm further said that it will be cutting costs separately by reducing facilities and the use of consultants and will streamline processes. The firm has also mentioned that it is in talks with unions over the cuts, which represent about 8.6% of the Swedish headcount at the end of 2023.

Slowdown in mobile services spending

The telecom industry has been facing challenges including increased competition, technological disruption, and changing market dynamics. As per Mint, European telecom equipment makers Ericsson and Nokia Oyj have struggled to rebound from a slowdown in spending across the mobile services industry.

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Ericsson has also warned earlier this year that its market outside of China would continue to decline in 2024 with investment by many operators remaining at “unsustainably low" levels. Meanwhile, mobile carriers are curbing their network spending as they have raised concerns over the competitive environment in Europe hurting return on investments.

A year ago, Ericsson had announced that it would cut 8,500 staff, or about 8% of its total workforce. Meanwhile its Rival Nokia Oyj said in October it would cut as many as 14,000 jobs, or 16% of its workforce.