The Global Mobile Communications Equipment Giant will Lay off 8,500 Employees
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Update time : 2023-03-02 12:46:17
Swedish telecom equipment maker Ericsson recently announced "global job cuts". The company will cut 8,500 jobs worldwide in stages, equivalent to 8 percent of its global workforce, with the aim of "cutting costs. Ericsson said that most of the job cuts will take place in the first half of this year, with about 1,400 people to be laid off in Sweden as part of a worldwide cost-cutting plan, and the rest in 2024. Earlier, Ericsson also planned to reduce costs by reducing the number of consultants, reducing office space and improving process efficiency.
Publicly available information shows that Ericsson was founded in Sweden in 1876 and has grown to become the world's largest mobile communications equipment provider. With operations in more than 180 countries and territories, Ericsson is the world's leading provider of end-to-end comprehensive communications solutions as well as professional services. By the end of 2022, Ericsson had a total of about 105,000 employees worldwide.
According to Ericsson's fourth-quarter 2022 and full-year 2022 financial results announced last month, revenue in the fourth quarter of last year was lower than expected due to slower sales of 5G equipment in markets such as the United States. Although Ericsson did not disclose which region was most affected, it predicted that North America may be the most affected, while growth markets such as India were the least affected.
For the full year, Ericsson's net sales for 2022 reached SEK 271.5 billion, up 17% year-on-year, but net profit was only SEK 19.1 billion, down 17% compared to the previous year. Regionally, while Ericsson's networking business grew its market share significantly in India, it was still unable to fully compensate for reduced demand in other markets, including North America.
Ericsson President and CEO Yikang Bao said that while the supply chain challenges eased in the fourth quarter of 2022, the inflationary environment remains. The company still needs to focus on overcoming the recent recession through commercial actions and improving the company's cost efficiency. The company's SEK 9 billion cost-saving actions are expected to start taking effect in the second quarter of 2023, and margins in the Network business will decline in the first half of 2023 due to changes in the business mix.
