Ericsson Plans 1,600 Layoffs in Sweden Amid Cost-Efficiency Push

Telecom equipment maker Ericsson has begun talks with trade unions in Sweden over plans to reduce its workforce by around 1,600 employees, the company announced in a statement on Wednesday. The move is part of ongoing efforts to improve cost efficiency while continuing to invest in core network technologies, it added.

“Ericsson has submitted a notice to the Swedish Public Employment Service. Approximately 1,600 positions could be impacted in Sweden. The company has initiated negotiations with the relevant Swedish trade unions,” the statement said.

It added that initiatives to increase operational efficiency will continue across the group but will not be announced separately.

The company said the proposed job cuts are intended to support its long-term strategy, which focuses on building programmable networks that allow telecom operators to offer differentiated services and unlock new revenue streams.

As of the end of December, the company employed roughly 90,000 people worldwide, including about 12,600 in Sweden, down from nearly 100,000 three years earlier. The latest cuts represent about 20% of the company’s Swedish workforce.

Ericsson has been steadily reducing its headcount in recent years. In Sweden alone, it announced plans to cut 1,400 jobs in 2023 and a further 1,200 roles in 2024. The latest proposal would deepen those reductions.

The broader cost-cutting programme was first outlined in early 2023, when Ericsson said it would reduce its global workforce by about 8,500 employees by 2026.

Ericsson, like its Nordic rival Nokia, has reportedly been under pressure from weak demand for network equipment as operators struggle to monetise fifth-generation (5G) services. In response, both companies have increasingly shifted their focus towards application programming interfaces (APIs), which they believe can help telecom firms generate income by exposing network capabilities to developers.

Investors appeared to welcome the move, with Ericsson shares rising in early trading in Stockholm. Analysts have pointed to cost savings as a potential driver of margin improvement ahead of the company’s fourth-quarter earnings announcement scheduled for January 23.

At the time of writing, the firm’s shares were up 1.29% at 88.02 SEK.