Ericsson To Cut 8,500 Jobs Globally In Largest Layoff In Telecom Industry History
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Ericsson, a telecommunications equipment manufacturer, plans to reduce its workforce by 8,500 employees worldwide as part of its cost-cutting strategy, according to a memo seen by Reuters. This would be the largest layoff in the telecommunications industry, surpassing previous releases by technology companies such as Microsoft, Meta, and Alphabet due to economic conditions. CEO Borje Ekholm wrote in the memo that headcount reductions would be managed differently depending on local country practices, and several countries have already been informed of the layoffs. Ericsson announced its intention to cut 1,400 jobs in Sweden on Monday but did not reveal which regions would be most affected. However, analysts predicted North America would hit the most complex, and growing markets like India would be impacted the least.
In December, the company announced its plan to reduce costs by 9 billion crowns ($880 million) by the end of 2023 due to a decrease in demand in specific markets, such as North America. In a memo, CEO Ekholm stated that it was necessary to reduce costs to remain competitive and warned against complacency as the company implemented cost-cutting measures. The pandemic has caused telecom companies to increase their inventories, resulting in a slowdown in orders for telecom equipment manufacturers. Verizon, one of the largest telecom companies, has reduced its capital expenditure budget from $23 billion last year to $18.25 billion and $19.25 billion this year. Ericsson's Chief Financial Officer, Carl Mellander, revealed earlier that cost reductions would involve cutting consultants, real estate, and employees. Meanwhile, Nordic competitor Nokia has not announced plans to lay off employees.
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