Ericsson AB has entered formal negotiations with Swedish labor unions to cut approximately 1,600 positions, representing more than 10% of its home-market workforce. The telecoms equipment supplier said the layoffs will span its R&D, manufacturing and administrative teams in Gothenburg, Kista and Linköping. Management expects the restructuring to be completed by the end of Q3, with most employees offered severance packages consistent with Swedish collective agreements. The move follows a comprehensive review of operational costs launched in January, and will mark the largest headcount reduction in Sweden since 2017.

By shedding 1,600 roles, Ericsson aims to trim annual operating expenses by roughly SEK 1.5 billion, or about 2% of its global cost base. Analysts estimate that the savings could boost the company’s adjusted operating margin by up to 100 basis points by year-end, supporting Ericsson’s goal of reaching a 15% margin in its networks division. While the job cuts may temporarily slow certain R&D projects in Sweden, management has stressed that investment in 5G software development and next-gen cloud-native platforms will be maintained. Investors should weigh the near-term restructuring charges—expected to total SEK 1.1 billion in Q2—against the longer-term margin enhancement and enhanced competitiveness against Nokia and Chinese rivals.