Ericsson to Cut 1,200 Jobs Amidst Slowing 5G Market

Telecom giant Ericsson is facing a harsh reality as it announces plans to cut around 1,200 jobs in Sweden – its home market.

This decision comes amidst a slowdown in the global demand for 5G equipment, a sector Ericsson is a major player in.

The job cuts were announced on Monday and represent roughly 8% of Ericsson's workforce in Sweden.

The company cited "challenging market conditions" as the primary reason for the downsizing, particularly in North America, where they've seen "further volume contraction as customers remain cautious." 

This news comes on the heels of Ericsson's earlier warnings about a potential decline in 5G equipment sales this year, including its key growth market of India.

Analyst firm Dell'Oro forecasts a stagnant trend for the worldwide RAN (Radio Access Network) revenue over the next five years, further painting a concerning picture for the industry. 

The Swedish company had already laid off 8,500 employees last year, which amounted to approximately 8% of its global workforce, in a similar cost-cutting effort.  

Ericsson is currently in negotiations with labor unions in Sweden to determine the specifics of the job cuts.

The company also stated that it would be implementing other cost-saving measures beyond layoffs, such as reducing reliance on consultants, streamlining internal processes, and optimizing its use of facilities. 

This move by Ericsson highlights the potential volatility of the 5G equipment market.

While there was a significant boom in demand for 5G infrastructure in recent years, it appears some market saturation is occurring, leading to a reassessment of spending by telecom operators. 

The impact of this slowdown on Ericsson's competitors and the overall 5G rollout landscape remains to be seen.