Workforce Reductions at Ericsson and Nokia
Over the past two years, Ericsson and Nokia have collectively reduced their workforce by approximately 20,000 positions, equating to about 10% of their combined staff. In stark contrast, Huawei has expanded its research and development (R&D) team by 33,000 employees during the same period, despite facing U.S. sanctions. So, Huawei has been expanding its operations and increasing its market share, while Ericsson and Nokia have been reducing their workforce and are facing financial challenges. How come.
Ericsson and Nokia have collectively cut approximately 20,000 jobs in recent years. Ericsson announced plans to lay off 8,500 employees globally, including 1,200 in Sweden, as part of cost-cutting measures amid slowing 5G investments. Nokia, on the other hand, reduced its workforce by 2,000 in Greater China and planned an additional 350 job cuts in Europe, aiming to save between €800 million and €1.2 billion by 2026.
The job cuts at these Nordic companies are attributed to a slowdown in 5G investments, particularly in the U.S., and intensified competition. This downsizing reflects broader challenges in the telecom sector, where operators are curbing capital expenditures, leading to reduced demand for network infrastructure.
Contrastingly, Huawei has been expanding its workforce and increasing its investments. Since 2016, Huawei has added 27,000 employees, while Ericsson and Nokia have reduced their combined workforce by 27,500. In 2024, Huawei reported a 22% increase in sales revenue, reaching 860 billion yuan ($118 billion), marking its fastest growth since 2016.
Huawei’s investment in research and development (R&D) has also surged, with annual R&D spending increasing by $12.2 billion since 2016. In contrast, Nokia reduced its R&D expenditure by $720 million during the same period.
Huawei’s dominance in the Chinese market has significantly impacted Ericsson and Nokia. Ericsson’s sales in China dropped from about $1.8 billion in 2020 to less than $990 million the following year, as 5G contracts were primarily awarded to local vendors like Huawei and ZTE. Similarly, Nokia’s revenues from Greater China fell from over $2 billion to about $1.5 billion.
The contrasting strategies of these companies highlight differing responses to market pressures and geopolitical factors. Huawei’s expansion may position it favorably in future technology developments, while Ericsson and Nokia’s retrenchment could impact their competitiveness. This divergence may influence global telecom dynamics, especially in the deployment of next-generation networks.
Check out the great overview at LightReading
