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

By Louis Goss

Ericsson on Monday said it expects to cut around 1,200 staff in Sweden, in a bid to lower its costs ahead of a predicted slowdown in the mobile networks market this year.

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

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

Shares in Ericsson (SE:ERIC.A) fell 1% on Monday, and were down 10% of their value over the previous 12 months.

The Stockholm-headquartered company, which currently employs around 100,000 people worldwide, said the plans sit in line with wider cost-saving initiatives that will see it cut spending on consultants and cut jobs in other regions.

In its statement, the Swedish firm, which first started in 1876, said it would maintain "investments critical to Ericsson's technology leadership," while also streamlining its processes and reducing facilities.

In January, Ericsson said it expects a slowdown in the global mobile-networks market - caused by a slump in investment in the buildout of new infrastructure in all markets outside China - which would hurt its sales throughout 2024.

Sales from Ericsson's mobile networks segment fell 23% in the fourth quarter of 2023, leading to a 17% drop in the firm's fourth-quarter revenue. The slump saw Ericsson's full-year earnings drop 27% year-on-year to SEK21.4 billion.

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

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

-Louis Goss

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03-25-24 0857ET

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