& cplSiteName &

Ericsson Plans 25,000 Job Cuts – Report

Ray Le Maistre
8/17/2017
50%
50%

In an effort to cut costs and boost profitability, Ericsson is planning to reduce its workforce by up to 25,000 staff, according to sources cited by Swedish newspaper Svenska Dagbladet.

Cuts of that magnitude would affect about 23% of the vendor's total headcount: Ericsson AB (Nasdaq: ERIC) ended June with 109,127 staff, down by about 7,000 from a year earlier.

The reported headcount reduction is linked to the company's plans to reduce its annual operating costs by 10 billion Swedish kronor (US$1.23 billion) by mid-2018, a move outlined by CEO Börje Ekholm when Ericsson reported disappointing second-quarter results last month that reflected intense competition and shifting capex trends. (See Ericsson Shares Slump on Gloomy Q2 Update.)

Ericsson CEO Borje Ekholm has some tough decisions to take as he attempts to improve the company's financial health.
Ericsson CEO Börje Ekholm has some tough decisions to take as he attempts to improve the company's financial health.

According to the sources cited by Svenska Dagbladet, the company's R&D operations in Sweden would not be affected, but the company's managed services unit, which employs about 30,000 staff, and multiple in-country operations across Europe could be hit hard.

It's also possible that the reported target could include any headcount reduction that would come from the sale of the vendor's media solutions business, which supplies broadcasters, media companies and communications service providers with technology for the delivery of multimedia services (primarily video) to all manner of end-user devices. (See Ericsson Moves Closer to Media Business Sale – Report.)

Ericsson responded to the report by noting that it has not yet communicated which parts of its business are going to be affected by the cost-cutting plans. Ericsson's full statement reads:

    Ericsson has previously communicated that a key component in the company's focused business strategy is to reduce costs and increase efficiency. In connection with the Q2 report 2017, Ericsson communicated that the company, in light of the current market outlook, will accelerate the planned actions to ensure that the target of doubling the 2016 operating margin beyond 2018 can be met. Actions will be taken primarily in service delivery and common costs, but do not include R&D. The plan is to implement cost savings with an annual run rate effect of at least SEK 10 b. by mid-2018, of which approximately half will be related to common costs.

    Ericsson has not communicated which specific units or countries that could be affected. It is too early to talk about specific measures or exclude any country. As Ericsson executes on these plans to save costs, the company will communicate this, and to what extent employees could be affected.

Ericsson's share price is down slightly, by 0.3%, to SEK49.57 on the Stockholm exchange Thursday morning. The vendor's stock has lost about 7.4% of its value since the start of this year.

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, International Group Editor, Light Reading

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
sarcher60555
50%
50%
sarcher60555,
User Rank: Lightning
8/17/2017 | 6:10:33 PM
Re: Never great
Who is left? Huawei, ZTE and ....???
Lubine
50%
50%
Lubine,
User Rank: Light Beer
8/17/2017 | 1:34:15 PM
so sad
25 000 : it's a lot of people.

It will be difficult to find a new job for every one of them.

I believe big companies are not the better way to develop a national economy and preserve employment. It's a question about security : many more little companies can produce the same thing with less risks for every one (but it cost more money).
danielcawrey
50%
50%
danielcawrey,
User Rank: Light Sabre
8/17/2017 | 9:18:07 AM
Never great
It's never good news to hear of layoffs. 

We've been hearing a lot about this recently. But 25,000 people is a lot - hopefully there are other opportunities for these people. 
Featured Video
From The Founder
The 'gleaming city on a hill,' Steve Saunders calls it. But who is going to take us from today's NFV componentry to the grand future of a self-driving network? Here's a look at the vendors hoping to make it happen.
Flash Poll
Upcoming Live Events
September 28, 2017, Denver, CO
October 18, 2017, Colorado Convention Center - Denver, CO
November 1, 2017, The Royal Garden Hotel
November 1, 2017, The Montcalm Marble Arch
November 2, 2017, 8 Northumberland Avenue, London, UK
November 2, 2017, 8 Northumberland Avenue – London
November 10, 2017, The Westin Times Square, New York, NY
November 30, 2017, The Westin Times Square
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Could 5G Have Found Its Glass Ceiling?
Dan Jones, Mobile Editor, 9/20/2017
1 Million Pirate Set-Top Boxes Sold in the UK
Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation, 9/20/2017
Comcast Shuts Down OTT Again
Mari Silbey, Senior Editor, Cable/Video, 9/19/2017
Why Amazon May Be Cable's Biggest Threat
Mari Silbey, Senior Editor, Cable/Video, 9/22/2017
Photo Highlights: Operations Transformation Forum 2017
Ray Le Maistre, International Group Editor, 9/17/2017
Animals with Phones
Live Digital Audio

Understanding the full experience of women in technology requires starting at the collegiate level (or sooner) and studying the technologies women are involved with, company cultures they're part of and personal experiences of individuals.

During this WiC radio show, we will talk with Nicole Engelbert, the director of Research & Analysis for Ovum Technology and a 23-year telecom industry veteran, about her experiences and perspectives on women in tech. Engelbert covers infrastructure, applications and industries for Ovum, but she is also involved in the research firm's higher education team and has helped colleges and universities globally leverage technology as a strategy for improving recruitment, retention and graduation performance.

She will share her unique insight into the collegiate level, where women pursuing engineering and STEM-related degrees is dwindling. Engelbert will also reveal new, original Ovum research on the topics of artificial intelligence, the Internet of Things, security and augmented reality, as well as discuss what each of those technologies might mean for women in our field. As always, we'll also leave plenty of time to answer all your questions live on the air and chat board.

Like Us on Facebook
Twitter Feed