Why Ericsson is Continuing Its Global Workforce Reduction

Ericsson CEO Börje Ekholm has confirmed that the Swedish telecommunications giant will continue to reduce its global workforce as part of an ongoing strategy to lower costs and navigate a stagnant market for 5G equipment.

Despite a slight recovery in some regions, the company remains under pressure to improve margins and streamline its operations amid cautious spending by major mobile carriers.

Ericsson Navigating a Challenging Global Market

The decision to pursue further job cuts follows a difficult period for the telecom infrastructure industry.

While Ericsson saw a significant boost during the early rollout of 5G, demand has slowed in key markets, including North America and parts of Europe.

Carriers are increasingly focusing on managing their existing inventories and delaying new network expansions.

Börje noted that while the “market remains challenging,” the company must stay disciplined to protect its financial health.

The Scale of Restructuring

Ericsson has already eliminated thousands of positions over the past year. In early 2024, the company announced it would cut approximately 1,200 jobs in Sweden alone.

The new round of reductions is expected to affect various global departments, particularly those associated with legacy systems and support functions.

These measures are part of a broader plan to achieve billions of dollars in annual cost savings.

By thinning its ranks, Ericsson aims to pivot more resources toward high-growth areas like Open RAN (Radio Access Network) and cloud-based mobile solutions.

A Focus on Efficiency and AI

Beyond simple headcount reduction, the CEO emphasized that the company is undergoing a fundamental shift toward automation.

Ericsson is increasingly leveraging Artificial Intelligence to handle network optimization and internal administrative tasks.

This technological shift allows the firm to maintain service quality with fewer employees.

Börje remains optimistic about the long-term outlook, citing a massive deal with AT&T as a sign that the market will eventually stabilize, though he warned that the recovery will be gradual.

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