Telecommunications and networking giant Ericsson on February 20, 2023 announced that it plans to slash 1,400 jobs in Sweden to reduce its operational costs.

Earlier in December 2022, the Stockholm-headquartered company had said that it was targeting to reduce costs by $880 Million by the end of 2023. This decision was attributed to a slowdown in global demand, including North America.

Those familiar with the recent announcement by Ericsson claim that in the coming days, the company can announce several thousand job cuts in different countries. The last time Ericsson saw layoffs of this magnitude was in 2017 when it laid off thousands of its employees to focus on research to pull the company back from losses.

The announcement to lay off around 1,400 Ericsson employees in Sweden was made after months of negotiations with its employee union on the issue. The discussions were focused on how to manage the headcount reductions. An Ericsson spokesperson said that an agreement has been reached with the Swedish unions. He also added that the company aims to make the job cuts through a voluntary programme.

The decision to cut 1,400 jobs comes a month after the telecom company reported their fourth-quarter core earnings, which were lower than expected. Ericsson shares hit fresh lows in the stock market as the sale of its 5G equipment reduced globally, especially in markets with high margins, like the United States.

Ericsson has announced its decision to lay off employees at a time when global technology and IT companies have cut down their workforce, citing the economic slowdown as a main reason.