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In response to a subdued demand for its 5G equipment, Ericsson, a leading telecommunications company, has announced plans to lay off approximately 1,200 employees in Sweden. This decision forms part of Ericsson’s broader cost-cutting strategy aimed at enhancing efficiency and navigating through challenging market conditions in 2024.
Last year, Ericsson initiated significant cost-saving measures by slashing 8,500 jobs, equivalent to about 8% of its global workforce, to mitigate financial pressures. In its latest statement, the company highlighted the necessity for further efforts to streamline operations amidst a projected contraction in mobile networks demand.
“The cost-saving initiatives encompass various aspects, including the reduction of consultants, streamlining of processes, and optimization of facilities,” Ericsson stated. The company has commenced negotiations with unions as it seeks to manage the downsizing process in compliance with collective bargaining agreements and Swedish labor laws.
At the close of 2023, Ericsson reported a workforce of 99,950 employees globally, with a notable presence of 10,744 workers in North America, according to filings with the U.S. Securities and Exchange Commission.
In an email to CNBC, an Ericsson spokesperson emphasized the company’s commitment to conducting the layoffs with fairness, respect, and professionalism. The spokesperson underscored Ericsson’s adherence to legal frameworks and collective bargaining agreements throughout the negotiation process with unions.
Ericsson’s announcement aligns with a broader trend of job cuts sweeping across the technology industry. Since the beginning of the year, over 50,000 workers have been laid off from more than 200 tech companies, reflecting ongoing efforts to optimize spending and enhance profitability.
Major industry players such as Alphabet, Amazon, Meta, and Microsoft have all contributed to this wave of job cuts in 2024, alongside notable companies like Cisco, DocuSign, Snap, and Zoom. The overarching goal for these companies is to drive efficiency and bolster profits through strategic cost management and leveraging artificial intelligence technologies.