New Delhi: Telecom equipment maker Ericsson will lay off 8,500 workers globally as part of its plan to cut costs, a memo sent to employees and Reuters said. While technology companies such as Microsoft, Meta and Alphabet have laid off thousands of employees citing economic conditions, Ericsson’s move would be the biggest layoff to hit the telecoms industry.
“The way the headcount reduction will be managed will vary depending on local country practice,” wrote Chief Executive Borje Ekholm in the memo. “Many countries have already reported reductions in workforce this week,” he said. On Monday, the company, which employs more than 105,000 worldwide, announced plans to cut about 1,400 jobs in Sweden. While Ericsson did not disclose which geographies would be most affected, analysts estimated North America to be the most affected and developing markets like India least affected.
The company said in December it would cut costs by 9 billion crowns ($880 million) by the end of 2023 because of slowing demand in some markets, including North America. “We have an obligation to remove this cost in order to remain competitive,” Ekholm said in the memo. “Our biggest enemy right now may be complacency.”
Many telecom companies had increased their inventory during the peak of the pandemic, which is now slowing orders for telecom equipment manufacturers. Verizon (VZ.N), one of the largest telecommunications companies, plans to spend between $18.25 billion and $19.25 billion this year, down from last year’s $23 billion capital expenditure budget.
Carl Melander, Ericsson’s chief financial officer, previously told Reuters that the cost cuts would include reducing the number of consultants, real estate and staff. Nordic rival Nokia (NOKIA.HE) has not announced any plans to lay off workers.