Ericsson, the Swedish technology group, announced a plan to reduce its global workforce by eight percent, affecting about 8,500 employees. The restructurings are framed as a response to anticipated pressures in the telecommunications equipment market tied to ongoing macroeconomic challenges. Bloomberg reports indicate that most of these changes will be completed in the first half of the year, with the remainder following in 2024. The initiative is part of a broader effort to cut costs by nine billion Swedish kronor, roughly 814 million euros, in a bid to strengthen the company’s financial resilience amid a volatile global backdrop.
Company spokesperson Jenny Hedelin stated via email that there is clear potential to simplify and streamline Ericsson’s internal processes, especially when addressing structural costs. Earlier projections suggested savings would also come from reducing the cost base of marketed products, highlighting a multi-pronged approach to improving efficiency across operations.
Ericsson employs a substantial workforce in Spain, including more than two thousand staff across Madrid, Malaga, and Barcelona where the company maintains several research and development facilities. The European footprint is complemented by a robust global presence, underscoring Ericsson’s role as a major player in telecommunication infrastructure and 5G deployment operations.
The company reported a profit of 1.678 billion euros for 2022, a figure that reflected a drop of about 21 percent from the prior year, a decline attributed by executives to short-term uncertainty as the world enters the early stages of widespread 5G network rollout. This context has influenced management to pursue structural cost controls as part of a longer-term strategy to navigate evolving market dynamics and maintain competitive advantage in key markets.
Additionally, Ericsson has flagged potential regulatory risks stemming from legal actions in the United States. The company has set aside approximately 200 million euros in anticipation of possible fines and other sanctions from the Ministry of Justice and related authorities. This provision signals a prudent approach to risk management while the group continues to assess the financial impact of regulatory developments on its global operations.