Globally renowned manufacturers of 5G networking equipment, Ericsson AB plans to lay off about 1,200 employees in Sweden as a way of dealing with its order decline and warning from mobile service providers.

It intends to cut down on expenses solely through streamlining procedures, cutting back on buildings, and hiring fewer consultants.

Aside from that, it is said to be in talks with unions over layoffs, which at the end of 2023 will account for roughly 8.6 percent of all Swedish employees.

Together with another mobile phone equipment manufacturer, which is Nokia Oyj, Ericsson are finding it difficult to recover from a downturn in expenditure in the mobile services sector.

Earlier this year, Ericsson stated that its market outside China will continue to contract in 2024, including many of operators’ investment levels staying unsustainably low.

In its response to customer complaints over low returns on investment from Europe’s competitive landscape, mobile operators are cutting back on network spending.

The rise of "open radio access networks," a technology that will make it easier for carriers to use various suppliers and increase competition for network components, is another issue that Nokia and Ericsson must deal with.

A year or so ago, Ericsson declared that 8,500 employees, or around eight percent of its whole workforce, would be let go. In October, rival Nokia Oyj announced that it would eliminate up to 14,000 positions, or 16 percent of its total staff.