Ericsson ‘to lay off staff in China’ as it reacts to falling sales

However, Ericsson CEO Börje Ekholm (pictured) said the company had improved 5G sales when it reported third quarter results.

“We continue to gain footprint in our business by leveraging our competitive 5G portfolio,” he said. “The 5G contracts now awarded by the three US Tier 1 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 were up 8% year-on-year, and digital services sales were up 6% again outside mainland China, where sales fell. And there has been a “sharp reduction” in sales of digital services in mainland China, Ekholm said.

As a result, Ericsson “plans to scale up” its sales and delivery operations in China, he said. This will begin in the fourth quarter, “on top of our restructuring charges”. He did not give figures on the number of people who will be made redundant.

But the supply chain poses a risk, he said. “Through continued measures for global supply chain resilience, we avoided impact to customers in the first half of the year,” Ekholm said.

But things changed at the end of the third quarter. “We have seen some impact on sales due to supply chain disruptions, and such issues will continue to pose a risk,” he warned.