Telecommunications equipment manufacturer Ericsson has announced plans to lay off 1,400 employees. It will do so in Sweden, and has confirmed that this measure is part of the plan it is implementing to reduce its costs globally, according to Reuters.
The cost reduction plan announced by the company aims to reduce its expenses by 880 million dollars before the end of 2023. Its implementation is due to the demand for equipment manufactured by the company, and in general in the telecommunications equipment, is down in several markets. Among them, the American.
It is likely that this reduction in jobs, which, as we have mentioned, only affects the company’s workforce in Sweden, will not stop there alone. Apparently Ericsson can announce more layoffs, of up to several thousand employees, in the coming days. As a consequence, there will be several thousand dismissed by the company.
The company’s last round of large-scale layoffs took place in 2017. It then laid off approximately 2,000 workers and focused on research, with the goal of turning the company from making losses. In this case, the dismissals will take place after the company has been negotiating with its workers’ union in Sweden for several months about the management of the cuts in the country.
These dismissals, therefore, are agreed with the representatives of the workers. Both in terms of their number and how to manage them. In fact, Ericsson expects all or most of them to occur. through a voluntary redundancy program.
In a statement echoed by Datacenter Dynamics, they point out from Ericsson that «As previously announced, Ericsson has accelerated cost optimizations globally by the end of 2023, of which 70% is in cost of goods sold and 30% will be in general and administrative costs. The cost savings cover several areas, such as the reduction of consultants, the tuning of processes or the reduction of facilities. As was said at the time, it will also include a reduction in staff«.
