Ericsson, a telecom company based in Sweden has just made an announcement about their plans of cutting operational costs.
The company officials were saddened to reveal that they had to take a grieving step in order to deal with their company’s operational costs.
Ericsson to Lay Off Employees
The latest reports confirm that Ericsson has decided that they will be laying off employees to cut operational costs. As part of their cost-cutting measures, they will be laying off 8,500 workers.
The company has already communicated its decision internally to all of the employees.
They revealed to the major news reporting firms on Friday that they will be executing their plans of laying off employees throughout the year 2023.
Reuters, a major reporting source had claimed that Ericsson had been planning to lay off their employees. With Reuters breaking the news, the stakeholders were on high alert.
They wanted the same confirmation from Ericsson so they could make the necessary decisions. Finally, Ericsson revealed their plans, and laying off employees is indeed part of their plans.
Employee Lay Offs
The latest data gathered by Reuters revealed that the company has a total of 105,529 employees from all over the world.
Thus, the company laying off 8% of the total employees translates to around 8,442 workers. Ericsson has confirmed that the impact would be on a global scale.
They will not be targeting employees from specific areas or regions. Instead, they will lay off employees worldwide.
It is important to mention that out of the total employees, 11,994 workers are from the North American region.
The information shared by Reuters falls in line with the information provided by Ericsson on their website.
What Led to the Cuts?
The spokesperson making a statement on behalf of Ericsson provided the reason why they had to resort to such a decision.
They revealed that apart from their operational reforms, they are also eager to carry out cost reductions in terms of their business structure.
They want to accelerate the reduction efforts as they want to make sure that things become favorable for their business.
According to sources, it was on December 15, at the Capital Markets Day of Ericsson, where they had communicated their plans for structural reforms.
The spokesperson went on to confirm that their goal is to implement the changes and reforms as quickly as possible. They want to ensure that their business is able to reach its operational potential.
For this purpose, they have to take the necessary actions and introduce reforms that can help ascertain the future growth of their business.
Plans for Lay Offs
It has been communicated that they are aiming to implement their actions in the first half of 2023. This means that they will start cutting down on their headcount in the upcoming months.
They want to get done with the process as they reach the end of June 2023. However, there is a possibility that the laying off may stick around for longer.
They have already considered the possibility that the layoffs may continue until the beginning of 2024. The reduction will
As the layoffs are international, they will be carried out complying with local laws. They will strictly adhere to the laws and requirements that they need to follow when reducing the headcounts.
They want to do everything in a fair manner regardless of the country and the employment laws. They want to compensate the employees according to the respective laws so they do not feel deprived of their rights or benefits.
Over the course of time, they will notify the employees who are to be taken off the schedules in the future.
After the announcement, the company’s share prices took a wrong turn. The company’s shares plummeted by 0.52% and more decline may be experienced as the company starts to reduce its headcount.
At the time of publication, Ericsson’s share prices are at $5.76 per share.