Swedish tech giant Ericsson is laying off 8500 employees worldwide as part of an US$860 million cost reduction plan, marking the largest round of redundancies the company has undertaken in over five years.
The 8,500 layoffs amount to roughly eight per cent of Ericsson’s global head count of approximately 105,000 employees.
Ericsson, which specialises 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 the telco vendor's “structural cost reductions efforts,” Ericsson told CRN.
In December, the company said it will cut costs by approximately US$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," the Ericsson spokesperson said.
"But we are also working on our service delivery, supply, real estate and IT,” Ericsson told CRN.
Ericsson recently announced 1400 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.
In July, Ericsson completed its blockbuster US$6.2 billion acquisition of Vonage with the goal of creating a new global communications platform.
Vonage had over 2000 employees when Ericsson acquired the company.
A US$1.4 billion cloud-based communications provider, Ericsson plans to leverage Vonage to expand its wireless enterprise business as well as boosting 4G and 5G capabilities.
The 8500 layoffs in 2023 mark Ericsson’s largest employee layoff round since 2017.
After the company selected Börje Ekholm as its new chief executive in 2017, Ericsson laid off over 10,000 employees throughout the year, according to annual filings from the company.
