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Ericsson Layoffs May Hit 25,000 Employee Staff Cuts: Report

Ericsson CEO Börje Ekholm
Ericsson CEO Börje Ekholm

Ericsson layoffs could involve 25,000 staff cuts, according to Svenska Dagbladet, a daily newspaper in Sweden. That figure represents about 23 percent of Ericsson's 109,000 employees. The mobile telecom equipment maker did not comment on the report.

Ericsson in July reported Q2 revenue slightly below Wall Street's expectations. Earlier in the year, the company announced a plan to create a sustainable profit model -- including investments in networks, IT and cloud services -- while potentially selling off or overhauling its media business. Moreover, the plan required Ericsson to "take out common costs," CEO Börje Ekholm told Tech Trader Daily in July.

Ericsson, like many telecom equipment providers, has been hard hit as telcos and enterprise customers shift their IT spending from CapEx purchases toward third-party cloud services and OpEx models. While Amazon Web Services and Microsoft Azure have soared, many telcos stumbled in the cloud market -- which led to even more pressure on telecom equipment spending.

Still, many equipment providers see 5G wireless networks as the next big opportunity. However, Ericsson doesn't expect 5G revenue opportunities to really kick in until about 2019. But even 5G may not be a near-term savior. JP Morgan doesn't expect the next-generation wireless technology to really grow at scale until about 2020, Tech Trader Daily has reported.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.