Telecom equipment maker Ericsson will lay off 8,500 employees globally as part of its plan to cut costs, Reuters reported on Friday. The company has announced plans to cut about 1,400 jobs in Sweden.
With this, Ericsson has joined the league of tech giants like Google, Meta, and Microsoft that have announced thousands of job cuts due to adverse economic conditions.
"The way headcount reductions will be managed will differ depending on the local country practice," Chief Executive Borje Ekholm wrote in a memo sent to employees. "In several countries, the headcount reductions have already been communicated this week," he said.
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Ericsson, which employs more than 105,000 worldwide, has not disclosed which geography would be most affected but the report said analysts had earlier predicted that North America would likely be most affected and growing markets such as India the least.
In December, the Swedish telecom giant said it would cut costs by 9 billion crowns ($880 million) by the end of 2023 as demand slows in some markets, including North America.
"It is our obligation to take this cost out to remain competitive," Ekholm said in the memo according to Reuters. "Our biggest enemy right now may be complacency."
Ericsson Chief Financial Officer Carl Mellander had earlier told the news agency that cost cuts would involve reducing consultants, real estate and employee headcount.
Last month, Google announced 12,000 job cuts while Microsoft said it would slash its workforce by 10,000. On January 20, Google CEO Sundar Pichai in a letter to employees said that over the past two years, the company had seen periods of dramatic growth. To match and fuel that growth, he said Google "hired for a different economic reality than the one we face today". He hinted that the tech giant was going through difficult economic cycles.
Two days before this, Microsoft CEO Satya Nadella announced that the tech major will reduce its workforce by 10,000 jobs through the end of FY23 Q3.
Nadella said the company saw customers accelerate their digital spending during the pandemic but now they were optimising their digital spending to do more with less. "We’re also seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one."