Swedish network biz Ericsson chops 1,400 jobs at home
(2023/02/21)
- Reference: 1676989686
- News link: https://www.theregister.co.uk/2023/02/21/swedish_network_biz_ericsson_chops/
- Source link:
Swedish networking kit maker Ericsson is laying off 1,400 employees in its home nation amid wider efforts to reduce expenses, and ahead of a deeper round of redundancies in other countries expected in the coming days.
The job losses are part of previously announced efforts to speed up "cost improvements" with an SEK 9 billion ($870 million) reduction earmarked for the end of 2023, of which 70 percent is to come from cost of goods sold and the remainder from sales, general and admin expenses.
"The negotiations with the Swedish unions are now closed and have reached agreement regarding ways of working for headcount reductions in Sweden," a spokesperson at Ericsson told The Register .
[1]
"Our intention is to handle the employee reductions through a voluntary program. The proposed reduction will affect approximately 1,400 positions in Sweden," the Ericsson mouthpiece added.
[2]
[3]
This equates to circa 10 percent of the Swedish workforce. The cost saving plan also includes a "reduction of consultants, streamlining of processes, reduced facilities, etc."
For calendar Q4, Ericsson reported a [4]34 percent plunge in profits as customers reined in 5G network spending to wait and see how the economy shapes up.
[5]
Execs said in January they expect enterprise network operators to "continue to sweat assets" in the near-term, with CEO Börje Ekholm saying it was still at the "early phase of global 5G rollout" in the enterprise, where Ericsson is trying to grow.
The CEO said in an earnings call, "we expect and plan for overall mobile networks market to be flattish in the next few years."
[6]BT in tests to beam down 5G coverage from the stratosphere
[7]Ericsson sells Russian network support biz to local managers
[8]Ericsson admits it may have paid off ISIS terrorists
[9]If you think 5G is overhyped, wait till you meet 5.5G
[10]White House pushes for total ban on US exports to Huawei
Ericsson expects 2023 to be "rather choppy with near-term uncertainties and macroeconomic headwinds that will likely impact operator capex. So, as expected, during Q4, we've seen some operators slowing the pace on network investments. And that includes front-runner customers in many markets," added Ekholm.
"We expect operators to continue to sweat the asset in response to the macroeconomic headwinds."
The plan for the year is to break even in terms of operating profit, the exec said on the call.
[11]
According to some sources, thousands more roles could be vaporized by Ericsson later this or early next in other country operations. It employs around 100,000 people worldwide. We asked the company to comment on this but it has yet to do so. ®
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[4] https://www.theregister.com/2023/01/20/ericsson_sees_earnings_fall_as/
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y-T4sfcNptJKfXnJAoSCcQAAAA4&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2023/01/31/bt_5g_stratosphere/
[7] https://www.theregister.com/2022/12/15/ericsson_sells_russian_network_support/
[8] https://www.theregister.com/2022/02/16/ericsson_iraq_review/
[9] https://www.theregister.com/2022/10/28/5_point_5_g_network/
[10] https://www.theregister.com/2023/01/31/huawei_us_exports_ban/
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y-T4sfcNptJKfXnJAoSCcQAAAA4&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[12] https://whitepapers.theregister.com/
The job losses are part of previously announced efforts to speed up "cost improvements" with an SEK 9 billion ($870 million) reduction earmarked for the end of 2023, of which 70 percent is to come from cost of goods sold and the remainder from sales, general and admin expenses.
"The negotiations with the Swedish unions are now closed and have reached agreement regarding ways of working for headcount reductions in Sweden," a spokesperson at Ericsson told The Register .
[1]
"Our intention is to handle the employee reductions through a voluntary program. The proposed reduction will affect approximately 1,400 positions in Sweden," the Ericsson mouthpiece added.
[2]
[3]
This equates to circa 10 percent of the Swedish workforce. The cost saving plan also includes a "reduction of consultants, streamlining of processes, reduced facilities, etc."
For calendar Q4, Ericsson reported a [4]34 percent plunge in profits as customers reined in 5G network spending to wait and see how the economy shapes up.
[5]
Execs said in January they expect enterprise network operators to "continue to sweat assets" in the near-term, with CEO Börje Ekholm saying it was still at the "early phase of global 5G rollout" in the enterprise, where Ericsson is trying to grow.
The CEO said in an earnings call, "we expect and plan for overall mobile networks market to be flattish in the next few years."
[6]BT in tests to beam down 5G coverage from the stratosphere
[7]Ericsson sells Russian network support biz to local managers
[8]Ericsson admits it may have paid off ISIS terrorists
[9]If you think 5G is overhyped, wait till you meet 5.5G
[10]White House pushes for total ban on US exports to Huawei
Ericsson expects 2023 to be "rather choppy with near-term uncertainties and macroeconomic headwinds that will likely impact operator capex. So, as expected, during Q4, we've seen some operators slowing the pace on network investments. And that includes front-runner customers in many markets," added Ekholm.
"We expect operators to continue to sweat the asset in response to the macroeconomic headwinds."
The plan for the year is to break even in terms of operating profit, the exec said on the call.
[11]
According to some sources, thousands more roles could be vaporized by Ericsson later this or early next in other country operations. It employs around 100,000 people worldwide. We asked the company to comment on this but it has yet to do so. ®
Get our [12]Tech Resources
[1] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y-T4sfcNptJKfXnJAoSCcQAAAA4&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
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[4] https://www.theregister.com/2023/01/20/ericsson_sees_earnings_fall_as/
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[6] https://www.theregister.com/2023/01/31/bt_5g_stratosphere/
[7] https://www.theregister.com/2022/12/15/ericsson_sells_russian_network_support/
[8] https://www.theregister.com/2022/02/16/ericsson_iraq_review/
[9] https://www.theregister.com/2022/10/28/5_point_5_g_network/
[10] https://www.theregister.com/2023/01/31/huawei_us_exports_ban/
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y-T4sfcNptJKfXnJAoSCcQAAAA4&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[12] https://whitepapers.theregister.com/
Re: 5G investments slowing
Graham Cobb
Yes and no. Of course I agree that consumers are not going to be spending more money.
However, with a very few exceptions, I don't think operator investment cases for 5G are generally built around consumer 5G phones. They do vary a lot with region and market types but I think they are mostly a combination of (i) cost reduction for some existing network spending (such as moving a bunch of network processing out of cell sites and into public cloud (AWS, etc)), and (ii) new business services/offers (such as factory automation, entertainment services for venues, immersive gaming/experiences, in-building wiring reduction, cloud-based enterprise security, etc).
Ok, so I'm thick
Lis
but what does "sweat the asset" mean? Apart from the obvious fact that whoever thought that phrase up is a knobhead.
5G investments slowing
This does not surprise me at all. While 5G brings some efficiency and performance gains to operators, there is still no 'killer app' use case for consumer 5G adoption.
I am no luddite, but cannot justify a handset upgrade to 5G for the couple of situations a year where it would be nice (some data connectivity in large scale venues where 4G runs out of puff).
For operators, 5G does not bring any additional users (or premium subscriptions) as far as I can see.
So the 5G vendors are at the end of a chain of discretionary spenders who are squeezed due to cost of living rises and layoffs are unfortunately a direct consequence of that.