Ericsson said on Monday it would cut 1,200 jobs due to "challenging networking markets in 2024." The stock fell about 1% in early U.S. trading on Monday. The stock has fallen about 60% over the past three years. The company also expects "further shrinkage in business as customers remain cautious." Ericsson is in talks with unions over 1,200 layoffs, which will affect its employees in Sweden.
"In addition to job cuts, cost-saving initiatives span areas such as reducing consultants, streamlining processes and reducing facilities, while Ericsson will continue to execute on its strategy to achieve a higher growth trajectory and achieve long-term profit targets through leadership in mobile networks and focused expansion into the enterprise space," the company said in a statement.
Currently, Ericsson has about 100,000 employees, of which about 14,500 are in Sweden, and has customers in 180 countries.
Ericsson recently struck a major deal with AT&T (T) for OpenRAN deployment, but the market's optimism about the news appears to have faded.
DMMartinsResearch said: "Ericsson is expected to struggle in 2024 due to global economic conditions, geopolitical uncertainty and operators' focus on cost savings."
According to data from layoff.fyi, a website that tracks layoffs in the technology industry, 219 technology companies have laid off more than 51,000 employees so far this year. However, this is far lower than the previous year. In the first three months of 2023, more than 167,000 employees in the technology industry were laid off.