Ericsson will lay off 8,500 employees globally as part of its plan to cut costs, CEO Borje Ekholm wrote in a memo sent to employees, Reuters news report said.
Ericsson, the leading telecom equipment maker, reported net income of SEK 6.2 billion (–39 percent) in Q4 2022 and SEK 19.1 billion (–17 percent) in 2022.

On Monday, Ericsson, which has 105,529 employees worldwide, announced plans to cut about 1,400 jobs in its headquarters in Sweden. Ericsson had 14,481 employees in Sweden in 2022-end.

Ericsson had an employee-base of 27,761 in South East Asia, Oceania and India, 13,207 in North East Asia, 11,993 in North America, 48,023 in Europe and Latin America and 4,545 in the Middle East and Africa region.

“The way headcount reductions will be managed will differ depending on local country practice,” Borje Ekholm wrote in the memo. “In several countries the headcount reductions have already been communicated this week.”

Ericsson said in December 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,” Borje Ekholm said in the memo. “Our biggest enemy right now may be complacency.”

Many telecom companies had beefed up their inventories during the height of the pandemic which is now leading to slowing orders for telecom equipment makers.

Verizon, one of the largest telecom companies, plans to spend between $18.25 billion and $19.25 billion this year, down from a capital expenditure budget of $23 billion last year.

Ericsson Chief Financial Officer Carl Mellander earlier told Reuters that cost cuts would involve reducing consultants, real estate and employee headcount.

Nokia has not announced any plans to lay off employees.