Ericsson To Lay Off 8,500 Employees In $860M Cost-Cutting Plan
Ericsson is conducting its largest layoff round in years after confirming it will lay off approximately 8 percent of its global workforce.
The 8,500 layoffs amount to roughly 8 percent of Ericsson’s global head count of approximately 105,000 employees. Ericsson, which specializes in networking and telecom, confirmed the layoffs would take effect during the first half of this year but could extend into 2024.
The cuts are part of Ericsson’s “structural cost reductions efforts,” Ericsson told CRN in an email. In December, the company said it will cut costs by approximately $860 million by the end of 2023 due to a slowdown in demand occurring in certain markets such as North America.
“We see potential to simplify and become more efficient across the company, especially in structural costs. But we are also working on our service delivery, supply, real estate and IT,” Ericsson told CRN.
Ericsson recently announced 1,400 employee layoffs will occur in Sweden.
The company did not provide information on which other regions would be most affected by the layoffs. Ericsson’s website said the company has approximately 12,000 employees located in North America.
Ericsson Acquired Vonage For $6.2 Billion
In July, Ericsson completed its blockbuster $6.2 billion acquisition of Vonage with the goal of creating a new global communications platform.
Vonage had over 2,000 employees when Ericsson acquired the Holmdel, N.J.-based company.
Vonage was a $1.4 billion cloud-based communications provider that Ericsson plans to leverage to expand its wireless enterprise business as well as boosting 4G and 5G capabilities.
The 8,500 layoffs in 2023 mark Ericsson’s largest employee layoff round since 2017.
After the company selected Borje Ekholm as its new CEO in 2017, Ericsson laid off over 10,000 employees throughout the year, according to annual filings from the company.
IT Layoffs In 2023
There has been a consistent stream of layoffs in the technology industry since the second half of 2022.
In 2023 alone, more than 400 IT companies have laid off over 110,000 workers, according to layoffs-tracking website Layoffs.fyi.
Some major tech layoffs this year include Microsoft announcing it will cut 10,000 employees, Google laying off 12,000 workers, Salesforce cutting 7,000 employees and Dell Technologies terminating 6,500 workers.
Ericsson, for its part, said the company will start seeing the cost-savings effect from its 8,500 employee layoffs by the second quarter of 2023.