Ericsson is reportedly planning to lay off between 3,000 and 4,000 staff this summer, according to Swedish newspaper Svenska Dagbladet.
Thousands more may have to go at the network equipment manufacturer as management look for additional cost savings of 10 billion Swedish kronor (US$1.2 billion), the newspaper said, citing anonymous sources.
Ericsson had around 115,000 staff in April, 17,000 of them in Sweden. A spokeswoman declined to discuss the news report, saying the company does not comment on rumors and speculation.
Ericsson is facing increasing competition from Nokia, which swallowed its took over Alcatel-Lucent, earlier this year, and especially from Chinese vendors such as Huawei Technologies and ZTE.
Hans Vestberg, Ericsson’s President and CEO, announced a restructuring in April, after disappointing sales and profit growth in the first quarter. The wave of management changes will take effect on July 1, as the company reorganizes around two networking business units, one for products and one for services, and two cloud business units, again for products and services, PC World reports.
Ericsson is also focusing centralized sales teams on media and on industrial customers. The new organization will be “leaner, more fit for purpose,” Vestberg said.
The company is already two years into a three-year program to slice 9 billion kronor off its annual costs, and while that program is on track, the company has already begun taking additional cost-cutting measures, according to the spokeswoman.