New job snip. Nth snip to employment. The Swedish multinational Ericsson plans a severe cut staff that would affect 8,500 employees, 8% of its staff globally. This has been advanced by the Reuters agency after consulting an internal memorandum of the telecommunications company.
Days ago the company had already announced that it planned to eliminate 1,400 positions in Sweden, where it is headquartered. The overall figure will be, however, as Jenny Hedelin, spokesperson for the group, has detailed to AFP, significantly higher.
“We see a potential for simplification and greater efficiency in the company, especially in terms of structural costs,” Hedelin says. “Unfortunately, the workforce will also have to be considered. We think that 8,500 jobs will be affected.” In 2022 the multinational added around 105,000 employees.
Reduce costs in a complex scenario
The objective is to reduce costs in a complex scenario, after the publication of results that did not meet the expectations for the year. In 2022 Ericsson posted net attributable profit of approximately SEK 18,724 million, equivalent to €1,678 million. The figure represents a decrease of 21.2% when compared to the results recorded in 2021.
In the last quarter the decline recorded by the company was even more pronounced, with 544 million in net profit and a decrease of 39.8% if compared to the same period of the previous year. The firm achieved in any case increases in net sales. One of its big handicaps is spending cuts by 5G system operators against the backdrop of slowdown and inflation. Ericsson is one of the large providers of this technology.
Regarding how and when the layoffs will be made, for the moment Reuters and AFP only specify that the majority will be made in the short term, throughout the first half of 2023. The process could last until 2024. “The way in which the dismissals will be managed Staff reductions will differ according to the local practice of the country”, advances Borje Ekholm, executive president of the firm, in the internal memorandum: “In several countries the reductions have already been communicated this week.”
In December Ericsson advanced its plans to reduce its expense chapter at around 880 million dollars by the end of 2023. “It is our obligation to eliminate this cost to remain competitive,” stressed Borje Ekholm, who warns that “the biggest enemy” of the company “may be complacency.”
Ericsson’s is just one more case in the job loss that the technology sector has registered in recent months, a wave of cuts that even Big Tech has not escaped. Between the end of 2022 and two months Starting in 2023, Meta has announced the layoff of 11,000 workers, Google 12,000, Amazon 18,000, Microsoft 10,000 and Salesforce 8,000. And they are not the only ones.
Images: Ericsson
