Telecom giant Ericsson Monday said it is reducing its headcount in Sweden as part of a global initiative to improve its cost position in the wake of a drop in sales and profits.
A slowdown in 5G investments predominantly in North America was a primary driver for Ericsson’s big drop in full year 2023 margins, the company said in January.
The Stockholm, Sweden-based developer of networking and communications technology said Monday in a press statement that it plans to lay off 1,200 of its Sweden-based employees as part of a move to cut costs.
Other planned moves include reducing the number of consultants it works with, streamlining processes, and cutting back on facilities.
The move to reduce headcount is not its first. Ericsson in February of 2023 unveiled plans to lay off 8,500 employees as part of a move to cut costs by $860 million.
The move to rein in costs come after Ericsson in January posted disappointing financial results for its fourth fiscal quarter and full fiscal year 2023.
For its fourth fiscal quarter 2023, Ericsson reported a 17-percent a year-over-year drop in sales in Swedish krona terms, driven by a 23-percent decline in network sales. Net income for the quarter fell 45 percent compared to last year.
Sales for all of fiscal year 2023 fell year-over-year by 10 percent, led by a 15-percent drop in network sales. The company also reported a solid net loss for all of fiscal 2023 compared to a profit for fiscal 2022.
North America sales took an especially hard hit, falling year-over-year by 43 percent in the fourth quarter and by 38 percent in the full year.