Ericsson to cut 1,200 more jobs in Sweden

Ericsson started its announcement by saying “As previously stated, Ericsson expects a challenging mobile networks market in 2024, with further volume contraction  as customers remain cautious." In its previous quarterlies announcement, Ericsson lamented “unsustainably low” operator investment levels, a situation it clearly doesn’t see changing any time soon. Various analyst reports published since then will have entrenched Ericsson’s pessimism.

“In line with managing lower volumes, Ericsson today announces proposed staff reductions in Sweden,” continued today’s announcement, later specifying a 1,200 target. “This measure is part of the global initiatives to improve the cost position, including headcount reductions, while maintaining investments critical to Ericsson’s technology leadership. Initiatives to increase operational efficiency will continue during 2024 but will not be announced separately.

“In addition to the headcount reduction, the cost saving initiatives cover various areas such as reduction of consultants, streamlining of processes, and reduced facilities, while Ericsson keeps executing on its strategy to achieve a higher growth trajectory and to reach the long-term margin targets, through leadership in mobile networks and a focused expansion into enterprise.”

This follows a similar announcement just over a year ago, although Light Reading reports that Ericsson headcount increased from 2018-2022, a period during which its main competitor was undergoing significant cuts. The report identifies a sharp drop in spending by US operators as the main reason Ericsson is having to tighten its belt, also suggesting that its big deal with AT&T may do less than expected to alleviate the gloom.

The fact that Ericsson is cutting jobs so soon after that deal was announced would appear to support the theory that it had to offer significant concessions to secure AT&T’s business. Ultimately, Ericsson is suffering from the fact that 5G has been so difficult to monetize. Until the returns on investment become clearer, operators are understandably opting not to spend much on it. Ericsson’s expansion into enterprise is spearheaded by its acquisition of Vonage, the recent massive write-down of which feels increasingly indicative of Ericsson’s current predicament.