Industry’s largest layoff to take place as Ericsson plans to terminate 8,500 employees
- ByStartupStory | February 25, 2023
Ericsson, the telecom equipment manufacturer, is set to lay off 8,500 employees worldwide as a part of its cost-cutting strategy. This move is similar to the actions of other technology behemoths such as Google, Meta, and Microsoft, who have announced significant job cuts due to unfavorable economic conditions. Notably, Ericsson has also revealed plans to eliminate around 1,400 positions in Sweden. The news was reported by Reuters on Friday.
Ericsson has recently announced its decision to reduce its workforce by laying off 8,500 employees globally, following the lead of other tech giants such as Google, Meta, and Microsoft who have also resorted to job cuts due to unfavorable economic conditions. In a memo to its employees, Chief Executive Borje Ekholm stated that the approach for managing headcount reductions will vary depending on local country practices, and some countries have already been informed of the job cuts this week. This update was reported by various news outlets.
Ericsson, a telecom equipment maker with a workforce of over 105,000 employees worldwide, has not revealed which region will be impacted the most by its decision to lay off 8,500 employees, but analysts have speculated that North America will likely be hit the hardest, while developing markets such as India may be spared. The company had earlier announced its plans to cut costs by 9 billion crowns ($880 million) by the end of 2023, citing a slowdown in demand in some markets, including North America. This update was reported in various news outlets.
Ericsson’s Chief Executive Borje Ekholm stated in a memo that the company has an obligation to stay competitive, which requires cost-cutting measures. “Our biggest enemy right now may be complacency,” he added, according to Reuters. Ericsson’s Chief Financial Officer Carl Mellander also revealed that the cost-cutting plan would entail a reduction in consultants, employee headcount, and real estate. This information was reported in various news outlets.
In recent times, several major technology companies have announced significant job cuts. For instance, Google revealed last month that it plans to lay off 12,000 employees, while Microsoft stated that it intends to reduce its workforce by 10,000. In a letter to Google employees on January 20, CEO Sundar Pichai acknowledged that the company had hired for a different economic reality than the one it currently faces. He also indicated that the company is navigating challenging economic conditions. Likewise, two days earlier, Microsoft CEO Satya Nadella announced the company’s decision to cut 10,000 jobs through the end of Q3 FY23. Various news outlets have reported on these developments.
According to a recent statement by Microsoft CEO Satya Nadella, many customers increased their digital spending during the pandemic, but are now optimizing their digital investments to achieve more with less. He noted that organizations across different industries and geographies are becoming more cautious as some parts of the world are already in a recession, while others are anticipating one. This information has been reported in various news outlets.
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