Ericsson to lay off 1,200 employees in Sweden amid mobile markets' slump

Ericsson to lay off 1,200 employees in Sweden amid mobile markets' slump

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By Luis Goss

Ericsson said on Monday it expects to cut around 1,200 employees in Sweden, in a bid to reduce its costs ahead of an expected slowdown in the mobile network market this year.

In a statement, the telecommunications company said it had started talks with unions to cut around 1,200 of the approximately 14,500 employees it employs in Sweden, equivalent to around 8% of its workforce in the Scandinavian country.

Explaining its rationale, Ericsson said the cuts are aimed at managing the impacts of the “challenging mobile network market” it faces in 2024, which it previously said could lead to a 10% drop in its full-year sales.

Ericsson (SE:ERIC.A) shares fell 1% on Monday and lost 10% of their value in the previous 12 months.

The Stockholm-based company, which currently employs about 100,000 people worldwide, said the plans are in line with broader cost-saving initiatives that will allow it to cut spending on consultants and cut jobs in other regions.

In its statement, the Swedish company, which started in 1876, said it would maintain “critical investments in Ericsson's technological leadership” while streamlining its processes and reducing facilities.

In January, Ericsson said it expected a slowdown in the global mobile network market – caused by a drop in investment in building new infrastructure in all markets outside China – which would hit its sales throughout 2024.

Ericsson's mobile network segment sales fell 23% in the fourth quarter of 2023, leading to a 17% drop in the company's fourth-quarter revenue. The drop saw Ericsson's annual profits fall 27% year-on-year to SEK 21.4 billion.

Ericsson previously warned that a slowdown in investment in India, following a boom fueled by 5G rollout, would lead to a drop in sales.

In February, an internal memo seen by Reuters showed that Ericsson was planning to lay off 8,500 of its staff worldwide.

-Louis Goss

This content was created by MarketWatch, operated by Dow Jones & Co. MarketWatch is published independently of Dow Jones Newswires and The Wall Street Journal.

 

(END) Dow Jones News

03-25-24 0857ET

Copyright (c) 2024 Dow Jones & Company, Inc.

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