STOCKHOLM, Feb. 24 (Reuters) – Telecom equipment maker Ericsson (ERICb.ST) will lay off 8,500 workers worldwide as part of its cost-cutting plan, according to a memo sent to employees and viewed by Reuters.
While technology companies such as Microsoft (MSFT.O), Meta (META.O) and Alphabet (GOOGL.O) have laid off thousands of employees due to the economic conditions, Ericsson’s move would be the largest layoff to hit the telecom industry.
“How staff reductions are managed will differ depending on local practices in the country,” Chief Executive Borje Ekholm wrote in the memo.
“Staff reductions have already been communicated this week in several countries,” he said.
On Monday, the company, which employs more than 105,000 people worldwide, announced plans to cut some 1,400 jobs in Sweden.
While Ericsson did not disclose which region would be most affected, analysts had predicted that North America would likely be most affected and emerging markets such as India the least.
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The company said in December it would cut costs by 9 billion kroner ($880 million) by the end of 2023 as demand slows in some markets, including North America.
“It is our duty to eliminate these costs in order to remain competitive,” Ekholm said in the memo. “Our greatest enemy right now may be complacency.”
Many telecom companies had increased their inventories during the height of the pandemic, which is now delaying orders for telecom equipment manufacturers.
Verizon (VZ.N), one of the largest telecom companies, plans to spend between $18.25 billion and $19.25 billion this year, compared to an investment budget of $23 billion last year.
Carl Mellander, Ericsson’s chief financial officer, had previously told Reuters that cost savings would come with a reduction in consultants, real estate and workforce.
Nordic rival Nokia (NOKIA.HE) has not announced any plans to lay off employees.
Reporting by Supantha Mukherjee in Stockholm; edited by Jane Merriman and Jason Neely
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