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Main article: Ericsson
2024: 1,200 employees laid off as sales collapse
On March 25, 2024, Ericsson announced its intention to reduce headcount due to a sharp decline in sales of telecommunications equipment. Approximately 1,200 people will be laid off in Sweden.
Ericsson said in a statement that difficulties are expected in the mobile market in 2024, as customers "remain cautious" in the context of the macroeconomic situation. In particular, customers are cutting costs for 5G equipment, while in a number of regions the introduction of fifth-generation services with autonomous architecture (5G SA) is slower than predicted. Thus, sales of 5G equipment are slowing down in North America.
Ericsson said it will continue to implement operational efficiency initiatives through 2024. Cost reduction measures cover various areas, including reducing the number of consultants, optimizing processes and capacity. PP Foresight analyst Paolo Pescatore says additional layoffs at Ericsson could occur by the end of 2024 and in 2025. This is primarily due to economic problems and difficulties in the segment of mobile infrastructures.
Ericsson had 99,950 employees as of the end of 2023, including 10,744 in North America, according to data from the U.S. Securities and Exchange Commission. In 2023, Ericsson laid off approximately 8500 employees, or about 8% of its workforce. These measures were necessary to reduce costs.
 | Due to the decline in sales volumes, Ericsson announces a reduction in the number of personnel in Sweden. The measure is part of a global initiative to improve the financial situation while maintaining investments critical to Ericsson's technological development, the company said in a statement.[1] |  |
2023
Laying off another 8500 employees
At the end of February 2023, it became known that the Swedish technology company Ericsson will reduce its staff by 8500 employees. This represents approximately 8% of the corporation's global workforce.
According to CRN, as of the beginning of 2023, Ericsson had approximately 105 thousand employees. Ericsson announced that layoffs will begin in the first half of 2023, but may last until 2024. The downsizing is part of a massive program aimed at reducing costs. This is necessary in the current macroeconomic situation and in a crisis. Which units will be affected is not reported.
In December 2022, the company announced that by the end of 2023 it would reduce costs by approximately $860 million due to lower demand in some markets, in particular in North America. Amid the general downturn, Ericsson announced it was cutting 1,400 employees in Sweden.
| | We see the potential to simplify and improve the efficiency of the entire company, especially in terms of structural costs. But we are also working to improve services, improve supply channels and optimize other assets, Ericsson quoted CRN as saying. | |
Ericsson is conducting mass layoffs amid problems in the telecommunications industry. In early 2023, Ericsson CEO Börje Ekholm announced that some operators had begun to slow down investment in the deployment of network infrastructure. The company says telecom industry participants will continue to adjust their business strategies in response to economic challenges. In this situation, companies will adjust the staff and limit the hiring of new specialists.[2]
Laying off 1,400 more staff to save $861m
In mid-February 2023, telecommunications equipment manufacturer Ericsson announced a reduction in staff by 1.4 thousand employees in Sweden. Ericsson's new layoffs are only part of a plan to reduce the company's costs around the world and it is possible that new cost savings measures will be taken in the future. In January 2023, Ericsson missed fourth-quarter earnings expectations and warned that cutting customer spending in the U.S. and other developed markets was weighing on its margins.
As of 31 December 2022, the headcount at Ericsson was 105,529.
By the end of 2023, the Swedish manufacturer of telecom solutions Ericsson expects to cut costs by more than $868 million, since demand in many regional markets has already slowed significantly since the end of 2019. According to Ericsson forecasts, 70% of funds will be saved in the product sales segment in 2023, and another 30% - on commercial, general and administrative expenses within the business. Back in 2017, Ericsson reduced more than 2 thousand people, and in 2022 the corporation fired 400 people in connection with the departure from the Russian market. In addition, the IoT division of Aeris was sold, which, according to some reports, reduced the company's quarterly expenses by $24 million.
Before going for layoffs in early 2023, according to DataCenter Dynamics, Ericsson had to negotiate with Swedish unions to jointly organize a redundancy process as part of a voluntary layoffs program. It is known that the savings program provides not only dismissal, but also optimization of processes, reduction of used space and the adoption of a number of other measures in the business processes of the company in Sweden. Cuts in Sweden are likely to be followed by several thousand more job cuts in other countries, DataCenter Dynamics reported, citing sources in Ericsson close to the matter.[3]
2018:50 employees fired for bribes
Main article: Corruption in Ericsson
On October 18, 2018, Ericsson announced the dismissal of 50 employees involved in corruption schemes when concluding contracts. Due to bribes, the Swedish telecommunications equipment manufacturer may be fined.
The company has fired 50 people since launching its own investigation in 2013, Reuters news agency reported, citing a spokesman for Ericsson. The reduction affected several regional missions, he added without providing additional information.
According to the Swedish newspaper Svenska Dagbladet, in 2017, the Securities and Exchange Commission (SEC) and the US Department of Justice launched an investigation on suspicion that top managers of the company paid bribes in exchange for concluding contracts in Asia, Europe, the Middle East and Africa (EMEA). Then it was reported that law enforcement agencies interrogated about 20 Ericsson employees.
In 2016, the authorities requested information about business transactions made by a division of Microwave Systems. Also under suspicion was the head of the Asia-Pacific office of Ericsson Mats Olsson.
Ericsson CEO Borje Ekholm in October 2018 said that this investigation is likely to lead to monetary fines and "other significant measures, the scale of which cannot yet be estimated."
Reuters clarifies that the US authorities impose heavy fines on companies that have violated the law on the fight against corruption in foreign economic activity (U.S. Foreign Corrupt Practices Act, FCPA).
In 2013, Ericsson was suspected of bribing Romanian ministers. The management of the company allegedly paid the Minister of Telecommunications of Romania Sorin Pantish 7 million euros for lobbying interests during the selection of the contractor of the contract to work with the national emergency emergency number 112. The company itself denied the fact of giving bribes.[4]
2017
Reduction of 17 thousand jobs per year. Total number of personnel 101 thousand people
On January 31, 2018, Ericsson announced the reduction of 17 thousand jobs in 2017. This figure includes employees from the company's staff, as well as employees working on contracts.
According to The Wall Street Journal, by the end of December 2017, Ericsson's total staff amounted to 101 thousand people against 117 thousand in June 2016. In the fourth quarter, about 10 thousand people lost their jobs. The company does not specify in which representative offices and technological divisions were dismissed.
The Swedish telecommunications equipment manufacturer is carrying out a personnel purge as part of a program aimed at doubling the operating profit margin (in 2016 it was 6%) and reducing annual expenses by 10 billion kronor ($1.2 billion) by mid-2018.
Plan to lay off 25,000 employees in overseas offices
Continuing to implement a strategy to reduce costs, the Swedish telecommunications equipment manufacturer Ericsson plans to reduce up to 25 thousand employees in its foreign offices, despite the fact that a total of about 195 thousand people work in the company, the Swedish newspaper Svenska Dagbladet reports in August 2017. According to the publication, employees in the areas of sales, logistics and production could suffer more.
In some countries, reductions will be more significant, up to the dissolution of 80-90% of the state, in some - less. Workers involved in Ericsson's office in Sweden should not be affected by the new wave of layoffs.
2016
Sending 1,600 employees to early retirement and plan to cut another 1,000 due to loss of contract in Italy
In early December 2016, Ericsson reported more than 1,600 job cuts through an early retirement program.[5]
December 20, 2016 it became known about Ericsson's plans to reduce the number of personnel due to the loss of the contract associated with the creation of the largest mobile operator in Italy.
In November 2016, telecommunications giant Vimpelcom closed a deal to merge its operator Wind Telecomunicazioni with 3 Italia (owned by Hutchison Holdings). As a result of the deal, which was estimated at 22 billion euros, the largest cellular company is being created in Italy.
According to Bloomberg, Ericsson, Huawei, Nokia and ZTE fought for a contract worth about $1 billion related to the merger and management of Wind and 3 Italia networks. The name of the winner has not yet been released, but, most likely, it became ZTE.
Having not received a large order, Ericsson is considering reducing the staff in the Italian office by 1000 people, which roughly corresponds to one-fourth of the total number of company employees in the country, the news agency reported, citing knowledgeable sources. They note that Ericsson operates the Hutchison network and part of the Wind network.
Ericsson is forced to conduct a personnel purge in order to reduce costs amid increased competition and weakening demand for telecommunications equipment. Cellular operators have cut investment in network infrastructure after spending billions of dollars to build LTE networks. At the same time, the transition to a new mobile communication technology - 5G - is expected no earlier than 2020.
Plan to Lay Off 3,000 Employees in Network Product Unit
On September 21, 2016, information appeared in the Swedish press about Ericsson's plans to cut jobs en masse. The company confirmed the layoffs.
According to Svenska Dagbladet, citing an internal Ericsson document describing a cost-cutting plan, the company is considering eliminating 3,000 work positions in the Swedish network product division.
In addition, according to the newspaper, Ericsson may close enterprises in the cities of Boros and Kumla, as a result of which the company will completely stop production of products that lasted about 140 years. About 1,200 people work at these plants, but layoffs will not be limited to these facilities: reductions are planned in other areas related to telecommunications equipment, including R&D departments.
Ericsson said that jobs will be reduced around the world, but the company did not name the exact amount of personnel cleaning.
| | We will make decisions for each country and employees separately, and where necessary, trade union representatives will always be the first to be notified [about the upcoming layoffs - note TAdviser], the Ericsson press service told Bloomberg. | |
Dismissal of more than 3 thousand employees
On June 15, 2016, it became known about the upcoming dismissal of from three to four thousand employees at Ericsson[6].
Svenska Dagbladet reported on the preparation of staff cuts in Ericsson. It is expected to lay off from three to four thousand employees, but the company needs to continue to reduce costs. Management is looking for ways to save about $1.2 billion more and cuts could continue. The company itself does not comment on what is happening.
Competition from Nokia, which recently merged with Alcatel-Lucent, and even more from Huawei Technologies and ZTE is growing and becoming tougher. Wireless network operators, meanwhile, are winding down investments in fourth-generation equipment in preparation for a technology change.
In April, following the release of low first-quarter results, Ericsson President and CEO Hans Westberg announced the start of the restructuring. Since July 2016, changes in the management of the company come into force. It creates two divisions - network equipment (separately for goods and services) and two divisions for cloud technologies - also for goods and services. The company has been conducting a three-year cost reduction program for two years. The annual savings, according to the plan, should be ~ $1.1 billion.
2015: Reduction of 2,200
On March 11, 2015, Ericsson announced major job cuts as part of a reorganization aimed at lowering costs.
The Swedish telecoms equipment maker is set to lay off 2,200 people, roughly equal to 2% of the company's total workforce. The liquidation of work positions will affect only the Swedish Ericsson enterprises and mainly those employees who are engaged in research, development and sales issues.
Ericsson cuts jobs
The announced cuts will be part of a cost optimization program announced in November 2014. Then Ericsson announced its intention to reduce annual spending by 9 billion Swedish crowns ($1.05 billion) by 2017.
"Theefficiency of administrative and economic expenses will also be increased and external costs will be reduced, for example, by reducing the number of consultants," Ericsson said in a statement on March 11, 2015.[7]
According to Bloomberg, Ericsson is again resorting to layoffs in an attempt to improve profitability in conditions when competitors in the person of Nokia and Huawei are ahead of the Swedish vendor in terms of sales growth amid the protracted weak growth of the telecommunications industry. Ericsson predicts that the wireless networking equipment market will grow by an average of 2-4% per year between 2015 and 2017.[8]
Before the 2,200 job cuts announced in March 2015, Ericsson last reduced headcount in 2012. Then about 1,550 people working in the Swedish representative office of the company lost their jobs. By the end of 2014, the total staff of the manufacturer totaled 115 thousand people, of which 17 thousand employees worked in their native country of Ericsson.
According to Bloomberg observers, for each Ericsson employee there are about $77,500 in revenue. Nokia has this figure of $87,000.
2012: Reduction of 1,500 staff in Sweden
In November 2012, Ericsson announced its intention to reduce the number of employees by almost 10%. According to the company, about 1,500 Swedes will be fired.
The cuts will affect all divisions of the company in Sweden. Tomas Qvist, Ericsson's head of HR, said the reason for the mass layoffs is the desire to keep the company competitive.
"Of course, for all our employees in Sweden, this is hard news. However, we must be confident that we can maintain market leadership, invest in development and research, and meet customer demands. To do this, we need to focus on reducing costs, increasing commercial and operational efficiency, "Quist commented. "Over the past years, we have been taking measures to improve efficiency in all regions and divisions, and reductions, unfortunately, are inevitable," he added.
According to Pund-IT lead analyst Charles King, Ericsson's problems are directly related to increased competition and the instability of the European economy.
| | "It seems to me that Ericsson has two main problems. The first of them is increasing competition in their key segment - the production of telecommunications equipment. The second is the general weakening of the global economy, which has affected a lot of companies in Europe, "comments[9]. | |
2010: 80,000 employees
The company has 80,000 employees (August 2010).
Notes
- ↑ Ericsson to lay off 1,200 staff in Sweden as 5G spending slows
- ↑ Ericsson To Lay Off 8,500 Employees In $860M Cost-Cutting Plan
- ↑ Ericsson to Cut 1,400 Staff. Telecom Firms Are Joining the Tech Jobs Rout
- ↑ Ericsson has dismissed 50 employees following U.S. corruption probe
- ↑ Ericsson Said to Weigh 1,000 Job Cuts After Italy Contract Loss
- ↑ Ericsson dismisses three thousand employees
- ↑ Next step in global Cost and Efficiency program
- ↑ Ericsson to Cut as Many as 2,200 Swedish Jobs to Lower Costs
- ↑ the analyst uvolnyaet 1500 sotrudnikov 509818 Ericsson dismisses 1,500 employees
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