Ericsson AB, one of the world’s largest providers of 5G networking equipment, has announced it will cut 1,200 jobs in Sweden as it deals with declining orders and caution from mobile service providers.
The company also plans to separately reduce costs and streamline processes by reducing the use of equipment and consultants, it said in a statement Monday. The company said it was negotiating with trade unions over job cuts, which would amount to around 8.6% of its Swedish workforce at the end of 2023.
European telecom equipment makers Ericsson and Nokia Oysi are struggling to recover from sluggish spending across the mobile services industry. Ericsson warned earlier this year that its market outside China would continue to shrink in 2024 as investment by many carriers remained at “unsustainably low” levels.
Mobile phone companies are cutting network spending and complain that Europe’s competitive environment is hurting their return on investment. Nokia and Ericsson will also have to contend with the emergence of “open radio access networks,” which will make it easier for carriers to use multiple vendors and create competition for network components.
About a year ago, Ericsson announced it would cut 8,500 jobs, or about 8% of its workforce. Rival Nokia Oysi announced in October that it would cut up to 14,000 jobs, or 16% of its workforce.
Ericsson shares were down 0.8% at SEK 56.97 at 1:08 p.m. on the Stockholm market. The stock price has fallen 9.9% since the beginning of the year.
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