Ericsson to Cut ~1,600 Jobs in Sweden in Push for Telecom Cost Efficiency

Ericsson’s latest announcement signals both urgency and continuation in its cost containment trajectory in Sweden. By taking steps to cut some 1,600 roles—amounting to over one-tenth of its Swedish workforce—the company is responding to weakening demand in its core telecom infrastructure business and macroeconomic pressures reducing operators’ capital expenditures. These actions are not isolated; they build on substantial reductions in 2023 and 2024, reflecting a sustained recalibration of cost structure rather than one-off downsizing.

Yet, the company is attempting to balance defensiveness with defense: while reducing headcount, Ericsson explicitly states its intention to preserve investments in areas deemed strategic—namely technology leadership and programmable high-performance networks. This suggests a prioritization within engineering, R&D, and future-oriented product lines, perhaps at the expense of legacy operations or less profitable segments. The unannounced ELA equivalents in other geographies (e.g. Spain, also recently affected) underline the global scope of restructuring. Below the surface, several strategic pressures are apparent.

First, market demand for mobile network infrastructure is softening. Operators have largely completed initial 5G rollouts, and new investments are proceeding cautiously. This has clipped revenue growth for Ericsson’s mobile networks segment, pressuring margins. Inflation and supply chain disruptions—including exposure to U.S. tariffs—further exacerbate input cost pressures.

Second, investor and market sentiment seem to reward cost discipline. Ericsson’s share price has reacted positively to the announcement in some local reports, perhaps interpreting the move as a signal of stronger financial discipline. There is likely pressure from shareholders for improved margins amid slowing top-line growth. Simultaneously, the company must manage social, regulatory, and union expectations—especially in Sweden, known for strong labor protections. Initiating formal negotiation and submitting notice to authorities are required steps that come with both legal requirements and reputational risks.

Third, Ericsson’s capability to redirect resources toward future revenue streams—cloud, enterprise software, CPaaS (as demonstrated by its acquisition of Vonage), programmable networks—is increasingly critical. Reports indicate some of these bets have yet to fully materialize into significant revenue, making cost cutting the lever to free up capital and improve capital allocation.

However, several open questions remain:

• How will Ericsson allocate the burden of the cuts across divisions (e.g. R&D, manufacturing, support)? If core innovation functions are cut, competitiveness over the medium term may be harmed.
• What timeline is expected for the impact of these layoffs on cost savings, and when will the market notice improvements in margins?
• Given global uncertainties—tariffs, inflation, supply chain constraints—what assumptions underlie Ericsson’s “maintained investment” claims?
• How will these Swedish cuts affect Ericsson’s competitive positioning with rivals like Nokia, Huawei, ZTE etc, particularly in Europe?
• What is the risk of backlash—or loss of morale—among the remaining workforce, and what retention strategies does Ericsson have?