Telecommunications equipment maker Ericsson is reportedly planning to cut thousands of jobs and implement drastic cost-saving measures this summer in the wake of disappointing profit and sales results in April.
According to a report from Swedish newspaper Svenska Dagbladet (SvD), 3,000 to 4,000 positions may be cut in the coming months, with the possibility of more to follow.
Ericsson currently has around 115,000 employees, SvD said.
The report said the cuts are part of Ericsson’s attempt to stay on track with its November 2014 initiative to save more than $1 billion through staff reductions and other cost-cutting measures. That goal has recently come under threat thanks to shrinking sales of network equipment in Europe and Latin America and put pressure on the company to carry out more cuts, the report said.
In an emailed statement to Reuters, Ericsson said its savings program is “on track” but noted “more remains to be done before the program is completed.”
In March 2015, Ericsson said it was initially planning to cut approximately 2,200 jobs, mostly in research and development and supply.
A little over a year later in April 2016, Ericsson announced an accelerated transformation plan to speed the changes and accelerate growth. Though cuts were not mentioned directly, Ericsson president and CEO Hans Vestberg said the company restructuring would be “leaner.”
“We are not satisfied with our overall growth and profitability development over past years,” Vestberg said at the time. “We are today announcing further actions to accelerate strategy execution and to drive efficiency and growth across the company even harder. We will create a leaner, more fit for purpose organization, to cater for the needs of different customer segments and to faster capture market opportunities. As 5G, the Internet of Things, and Cloud drive the next phase of industry development, the time is just right to make these changes.”
