Ericsson could shed 25,000 jobs in turnaround bid
Losses widen in second quarter as soft telecom market and mounting competition weigh
Ericsson may lay off around 25,000 employees outside its home market of Sweden as part of a cost savings program, Reuters is reporting, quoting Swedish daily Svenska Dagbladet.
Ericsson will be primarily targeting personnel in service delivery and while also looking to lower common costs.
The telecommunications equipment maker had said in July it would accelerate measures to meet a target of doubling its 2016 underlying operating margin of 6%. Ericsson said it aimed to reach an annual cost reduction run rate of at least 10 billion crowns ($1.2bn) by mid-2018.
Ericsson has around 109,000 employees. Its Middle East operations cover 22 countries in the region with over 3,800 employees.
The company faces mounting competition from an insurgent Huawei and traditional rival Nokia.
Meanwhile, Ericsson’s financial results for the second quarter of 2017 point to deteriorating market conditions for the erstwhile industry leader.
Sales were down 8% to $6bn, while its operating loss widened to $145.3m in the quarter.
“We are not satisfied with our underlying performance with continued declining sales and increasing losses in the quarter,” said Börje Ekholm, President and CEO of Ericsson, while vowing accelerate the planned actions to reduce costs.