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Ericsson to lay off 1,200 staff in Sweden as Chinese competition bites

Swedish telecoms equipment giant Ericsson said on Monday it was cutting 1,200 staff in Sweden, or 8.6 percent of its Swedish workforce, as it faces a "challenging" market for mobile networks.

Published: 25 March 2024 15:12 CET
Ericsson to lay off 1,200 staff in Sweden as Chinese competition bites
Many of those laid off will work at Ericsson's headquarters in Kista, Stockholm. Photo: Ericsson

The company said it “expects a challenging mobile networks market in 2024, with further volume contraction as customers remain cautious.”

“In line with managing lower volumes, Ericsson today announces proposed staff reductions in Sweden,” it said in a statement.

Ericsson said the measure was part of global initiatives to reduce costs, including staff reductions, streamlining processes and reducing consultants, “while maintaining investments critical to Ericsson’s technology leadership.”

It said it had initiated negotiations with unions for a “headcount reduction of approximately 1,200 in Sweden.”

According to Ericsson, the company’s Swedish organisation employs around 14,000 people across all business areas.

Globally, Ericsson has around 100,000 staff.

Ericsson posted a sizeable loss in 2023 as a result of write-downs and restructuring costs, warning in January that it was expecting further market decline. Ericsson said it was 26.1 billion kronor ($2.5 billion) in the red last year after making a 19-billion-kronor profit in 2022.

The company, which is in a fierce competition over 5G networks with Finland’s Nokia and Chinese high-tech firm Huawei, in February 2023 also launched a cost-cutting programme that included eliminating 8,500 jobs.

Nokia said last year it could cut its workforce by up to 14,000 people, reducing costs by up to 1.2 billion euros by 2026.

Member comments

  1. The heading says something about “Chinese competition”…I
    think this should be redrafted to caputure the facts better.
    Perhaps something along the lines of Chinese state subsidised suppliers gain share by undercutting pricing etc.

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For members

NORTHVOLT

Northvolt warns work permit salary threshold could jeopardise Sweden’s green transition

Sweden’s minimum salary threshold for work permits has increased by almost 120 percent in less than a year, and there are plans to increase it again to the median salary next summer. Battery manufacturers Northvolt warns that this could stop the company from hiring and retaining key workers.

Published: 3 July 2024 12:32 CEST
Northvolt warns work permit salary threshold could jeopardise Sweden's green transition

“Northvolt’s extensive labour requirements in northern Sweden cannot currently be met by permanently established workers in Sweden or within the EU,” the company wrote in a response to the government’s proposal to raise the salary threshold to the median salary, currently 35,600 kronor.

“This applies in particular to machine operators and technicians, whose minimum wages under collective bargaining agreements are lower than the median wage, and therefore are particularly vulnerable in this context.”

The EU has highlighted qualified machine operators and technicians as professions which are particularly hard to source within the bloc, meaning companies often have no choice but to source these workers from non-EU countries.

Northvolt has the added complication of being located in northern Sweden, an area which in general often struggles to find key workers in a number of industries, and the company isn’t convinced that enough is being done to fix this.

“Northvolt does not believe that the government and the Public Employment Service’s measures to promote geographic mobility in the Swedish labour market is going to be able to cover the company’s need for labour,” it wrote, while adding that it believes the proposed hike to the work permit salary threshold could have “significant consequences” for its facility in Skellefteå.

“Aside from the direct effects on the company, Northvolt sees a risk that staffing in healthcare, services and infrastructure in northern Sweden could be negatively affected by the salary threshold, which would indirectly affect Northvolt’s expansion.”

In addition to this, the company deems the proposed exemptions to the salary threshold – these would be put forward by the Migration Agency and the Public Employment Service based on professions where there’s a labour shortage – to be insufficient and unpredictable.

Northvolt’s criticism highlighted the fact that the exemptions are based on a model which is currently under development and which may not be ready by the time the law is due to come into force, as well as the fact that professions with a labour shortage will be defined using a so-called SSYK code.

Some key roles for Northvolt to do with battery production do not have one of these codes, as they are relatively new roles.

“It remains to be seen how the proposed model would effectively be able to identify professions with a labour shortage when they don’t have an SSYK code,” the company wrote, adding that this all makes it harder for the company to plan, for example, will an employee who is granted a work permit once be eligible for renewal two years later?

“The employee in that situation would risk being deported from Sweden. If that were to happen, it would be deeply unfair for the employee who has contributed to supporting Swedish society in a role where there is a shortage, and a catastrophe for the employer who has invested years of education and talent in the employee.”

“This lack of predictability can be compared to earlier notorious so-called kompetensutvisningar (talent deportations), and will further complicate the recruitment or necessary talent,” it wrote.

TALENT DEPORTATIONS:

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