Ericsson to cut costs by axing 25,000 more jobs

Ericsson is reportedly considering getting rid of 25,000 more jobs in a major cost-cutting drive. The Mobile Telecoms unit has already axed around 7,000 jobs over the last 12 months and is now looking to slim down its global operation even further. According to Swedish daily Svenska Dagbladet, the mobile telecom maker is looking to shed jobs as part of its savings program.

While the company would not rule out any country it said that the latest round of job losses would take place outside of Sweden. "Ericsson has not communicated which specific units or countries could be affected. It is too early to talk about specific measures or exclude any country," Ericsson said in a statement on its website.

If the number is correct, Ericsson’s workforce would fall below 100,000 with it currently standing at 109,000. In July, the company said that it would ‘accelerate measures’ to meet a target of doubling its 2016 underlying operating margin of 6 per cent. It aimed to reach an annual cost reduction run rate of at least $1.2 billion by mid-2018.

The Swedish newspaper reported that there are advanced plans to cut Ericsson’s operations by 80-90 per cent in some markets, and centralise several European markets. Ericsson has said actions will be taken primarily in service delivery and common costs while research and development would be largely unaffected. Job losses could also impact employees within Ericsson’s media operations, which are up for strategic review.

Although the Swedish company had posted a string of underwhelming quarters, the second quarter losses of 1,17 billion SEK ($150 m) caught the markets by surprise. The marked drop from Q2 2016 profits of 2,2 billion SEK ($270 m) saw Ericsson’s A-class stock plummet 15 per cent on the same day.