Ericsson Layoffs 1200 Employees in Sweden Amid Slowed 5G Demand

Ericsson the Swedish telecommunications giant has announced to lay off approximately 1200 employees in its home country Sweden amidst the reduction seen in demand for 5G network equipment. This decision of the country has come across as a part of its broader cost-saving initiative for the year 2024. The company is also considering actions like trimming consultants, optimizing processes, and consolidating facilities as part of cost-cutting.

The company has attributed the downsizing to the expectations of a challenging mobile networks market throughout the year, where customers are expected to exercise caution while spending. This is not the first time that Ericsson has cut down its workforce. Last year, the company laid off 8,500 employees globally.

Its decision to reduce the workforce in Sweden shifts focus towards the broader trends in the telecom sector where suppliers are adjusting to slower 5G equipment sales, particularly in regions like North America and India. Despite earlier optimism surrounding 5G technology, its uptake has been slower than anticipated, prompting companies like Ericsson to reassess their strategies and cost structures.

However, Ericsson has emphasized its commitment to managing these layoffs with transparency and in accordance with collective bargaining agreements and Swedish labor laws. The negotiations with unions have already been commenced for the same.

The announcement made by this telecommunication giant somewhere reflects ongoing challenges in the tech industry where numerous companies other than Ericsson are implementing significant workforce reductions. In 2023, the industry witnessed substantial layoffs affecting over 2,60,000 jobs across nearly 1200 companies. And since the beginning of this year, over 50,000 employees have been laid off from more than 200 tech firms.

Now, Industry analysts anticipate that further layoffs could be on the horizon for Ericsson and other telecom equipment providers as they navigate ongoing challenges in the mobile infrastructure market. The company's cost-saving measures include not only job cuts but also efforts to enhance operational efficiency by reducing consultants, optimizing processes, and consolidating facilities.