Mobile networking giant Ericsson to lay off 1,200 workers in Sweden

March 25 (UPI) -- Facing a "challenging" mobile networks market this year, Swedish telecommunications giant Ericsson announced Monday it is laying off approximately 1,200 employees in its home country.

The $189 billion company said in a release it has "initiated negotiations with the unions" regarding the layoffs, which are coming as a result of "further volume contraction as customers remain cautious."

"In line with managing lower volumes, Ericsson today announces proposed staff reductions in Sweden," Ericsson said. "This measure is part of the global initiatives to improve the cost position, including headcount reductions, while maintaining investments critical to Ericsson's technology leadership.

"Initiatives to increase operational efficiency will continue during 2024 but will not be announced separately," it said.

The layoffs come ahead of Ericsson's first quarter statement due on April 16, in which analysts expect it will disclose earnings of 4 cents per share -- a 50% decline from the year-earlier figure. Revenue is expected to be $5.3 billion, marking a nearly 11% decline compared to the first quarter of 2023.

There is no timeline for the negotiations with the four unions involved, which will carried out "at their own pace," Ericsson spokesman Ralf Bagner told Swedish Television, adding he could provide no further details on where the layoffs would be instituted.

Ericsson, founded in 1876, has nearly 100,000 employees worldwide, including nearly 14,000 in Sweden, according to a company factsheet. Over the last decade, reports indicate it has emerged as the world's largest supplier of LTE technology, holding a dominant market share through its networks of LTE systems worldwide.

Ericsson is now focusing on its 5G system development and has launched efforts to position itself as a market leader, according to analysts. As of this month, it has 158 live 5G networks across the globe, spanning 67 countries.