Ericsson ‘to fire staff in China’ as it reacts to falling sales
Ericsson has lost market share in China and its overall global sales were down by 1%, the company reported this morning.
However Ericsson’s CEO, Börje Ekholm (pictured), said the company has improved its 5G sales, when he reported third quarter results.
“We continue to win footprint across our business by leveraging our competitive 5G portfolio,” he said. “The 5G contracts now awarded by all three tier-1 US carriers are the largest in Ericsson’s history.”
China and the emergence of supply chain issues were the two main negatives in Ekholm’s discussion of the results.
Network equipment sales outside mainland China rose 8% year-on-year, and digital services sales roles 6% again excluding mainland China, where sales have fallen. And there was a “stark sales reduction” in sales of digital services to mainland China, said Ekholm.
As a result Ericsson is “planning to resize” its sales and delivery operations in China, he said. That will start in the fourth quarter, “adding to our restructuring charges”. He did not give any figures for the number of people who will be fired.
But the supply chain poses a risk, he said. “Through continuous measures for global supply chain resilience, we avoided customer impact during the first half of the year,” said Ekholm.
But things changed late in the third quarter. “We saw some impact on sales from disturbances in the supply chain, and such issues will continue to pose a risk,” he warned.