Interestingly I work at Ericsson Germany and we only got notified of this today. Just six days ago I commented:
> Oh no. Since a large part of many medium-large sized tech companies' management style seems to consist of "copy what Amazon and Google are doing", I am scared of what silly decisions in other companies this might inspire.
I feel that my model of Ericssons upper management has been validated with one more data point, which is one reason why I would not be all that bummed if it turns out to hit me.
Except that in the « old » economy, you would be hard pressed to be allowed to fire thousands of people with a P&L showing billions in profit (at least in France).
Tech / IT is of course special, because it was seen (correctly) as an engine of indeterminately large growth: software scales really well, and integrated circuits are almost as good, currently limited by production capacity, not market demand.
For this tech received very special treatment, colossal P/E, a shower of investment, all in an attempt to grab a slice of this wildly growing pie.
But almost every exponent in reality is a bottom part of an S-curve. The growth was indeterminate, not infinite. As growth stalled or reversed, the special treatment did not exactly stop, but its extent contracted severely. Questions about actual profitability started to arise, for instance.
except the tech industry has been immune to layoffs because it would represent such bad PR to be the one company downsizing in the midst of a bull market. Fortunately for the tech industry, the market is now bearish and they're finally allowed to trim the fat that they've been accruing for over a decade, which is why when someone finally blinked first then the rest followed (and continue to follow).
We don't, I already went through this several times since the first .com wave.
And seeing the support we got in several times via the union fellows in the European countries I have worked on, is also a reason why I am quite supportive of them.
All these layoffs we’re seeing were planned well over six months ago. It’s not coordinated or copy-cat. However, it may be that all the bean counters learned the same lessons in the same schools. So, given certain scenarios, their best answer is: layoff people.
It's definitely not like Ericsson went on a hiring spree during covid, like most other companies that are now laying people off. Their employee numbers have barely changed since 2019.
Well, at least Germany is at the brink of a recession. And the signs are there to see for quite a while now. Companies restructering and preparing for an expected economic downturn can be hardly called bad management. Also, not eveything is driven by Big Tech, nor does everyone just copy ehat FANG is doing.
Probably people were "wishing" for the economies not to plateau or go into recession. Remember how they were saying, well, that's not the official definition, claiming the working definition used was not relevant. I think many believed that rhetoric and are now in a situation where they are confronting reality.
I'm a former Ericsson field engineer, These layoffs seem to have more to do with the normal telecom deployment lifecycle (aka LTE and 5G deployment periods winding down) than anything else.
Telecom equipment sales is often very cyclic.
To note further, Ericsson, Nokia et al, shouldn't be thought of as IT companies in the same vein as Google, Apple and Facebook. They exist in a very different parallel universe.
Indeed, telecoms is not the same thing, specially in what concerns standards, patents, kind of software that gets developed versus hardware and so forth, former Nokia Networks over here.
> Nordic rival Nokia (NOKIA.HE) has not announced any plans to lay off employees.
This prompted me to think, is Nokia still around? Then I looked it up and:
> In 2020, Nokia employed approximately 92,000 people[6] across over 100 countries, did business in more than 130 countries, and reported annual revenues of around €23 billion.[4]
The better known part of Nokia for most people was their mobile phone business, which was spun off and sold to Microsoft who then drove it into the ground, but the other parts of the company are still there.
We speculate that when Microsoft bought that part of Nokia, somewhere in the process the Sync.com domain name went up for auction (which appeared to be owned by Nokia just prior to the spin off).
As a startup trying to get going with Sync.Us, rebranding to https://www.sync.com really helped us take off.
If you mean they're not as prevalent as they were, sure I suppose. But they sold the business unit off again to HMD Global, who still make Nokia phones, such as the '3.4', the Android One (which is what led me to it - reasonably stock and years of updates - I previously had a Motorola for the same reason) device I'm typing this comment from.
“Drove it into the ground” is, I think, unfair. The entire market was moving to Android and iOS. Microsoft and Nokia were late to the transition, tried to catch a section of the market, and failed. The succeeded in creating good products at the time, but having a good product is not enough, especially if you’re late to the market.
> On Monday, the company, which employs more than 105,000 worldwide, announced plans to cut about 1,400 jobs in Sweden.
While Ericsson did not disclose which geography would be most affected, analysts had predicted that North America would likely be most affected and growing markets such as India the least.
The cost cutting will continue until profits improve.
A lot of related companies (Cisco, Juniper, Palo Alto Networks) are based in South Bay. If you want to hire anyone from those companies or do partnerships with them, you should probably have a bay area satellite office despite the costs.
Do you disagree with the described strategy? If you think a market is relatively saturated (as I assume the US is from a telecom equipment perspective, especially given growing suspicion of foreign suppliers), wouldn't you allocate your limited resources to markets that have room to grow?
Ex-Ericsson engineer here, I was at the company for 13 years. Regarding the size - lot of people don't realize because it hasn't been a front-facing company since the collapse of its phones business, but it really is invested in tech right across the board - from developing its own real-time operating systems to its own massive-core chipsets used in base stations, to its own ML platforms. Just the research arm of Ericsson is huge in itself, I think they have around 60 000 patents granted, and are doing everything from fundamental RF research, to quantum machine learning. Not to mention a huge managed services business that helps telecom operators run their networks.
Regarding the lay-offs - telecom industry is essentially a sinewave. The "good" period (e.g. from 5G prototype to complete network migration to 5G) lasts approximately 5 years. The way contracts are signed means that you sell X number of network nodes (base stations, core nodes, etc) and some kind of support contract to go with it. After that, there is nothing. Very different from public cloud providers where you pay as you go. Ericsson and most telecom vendors still haven't figured out how to monetize this.
They make the software that runs mobile networks and part of the hardware (as in radio towers, even chips in the past), various special purpose hardware used in the past is also still in use. They also operate these networks as a service to telecom providers. The goods and services they provide are spread pretty wide.
Does manufacturing account for a large portion of those 100k+ employees? Ericsson is not a fabless semiconductor firm, after all. They need to produce things like enclosures and PCB's (perhaps that is done by 3rd parties).
Yeah that surprised me as well. It would be interesting to get a ‘tech company ordered by headcount’ list but it would make me nervous the listing would result in some executive deciding they should layoff more people.
Why? Ericsson has always been a back-end networking and telecommunication company.
Erlang was created, at Ericsson, for a telephony switch.
It's shuttered the consumer side entirely (Sony Ericsson was a joint venture, not a group), it's one of the lead developers in mobile telephony, as well as the lead IP holder in the domain.
In Europe also a large player in the broadcast space, though Red Bee Media (formerly Ericsson Broadcast and Media Services): BBC, Channel 4, ITV, Canal+, as well as Channel 4 and Channel 5's VOD. RBM is also a huge provider of closed captioning, signing, and audio description worldwide, by far the largest in europe for more than 15 years (after they acquired Mundovisión and Titelbild).
If the parent was typing the above message on a phone attached to their telecom network, there is a high probability their user and control plane traffic was going through Ericsson systems.
I didnt expect that Ericsson even had 8500 employees to lay off. Kind of disappeared from the radar after the mobile phone era. (Yes i know they still make equipment)
Does anyone at Ericsson still use Erlang? If so I hope these layoffs do not negatively impact internal use of Erlang at Ericsson. It’s a language built on some pretty nifty ideas.
Of course old networks are still operated and maintained. 5G is exclusively "cloud-native" (i.e. microservices on Kubernetes) and most common core components are written in Java, Go and Python. So while Erlang is still being used and ran, most new code is not written in Erlang, as far as I know.
Think about network functions that where these languages do not make sense; then you will find they are not used. You wouldn't write a packet processing router in any of those languages (aka UPF). High availability, fault tolerant applications for NAS and non-NAS signalling speaking to the gNodeB/UEs - same deal.
On a parallel note, when I was at Nokia Networks, the long-term plan was to replace everything that was using a mix of C++ and Perl for distributed computing in HP-UX with Java, leaving C++ only for the low level hardware stuff.
Not sure how much of it ended up happening, after all the layoffs in Germany a couple of years ago.
This is very interesting thank you. I always said to myself if I was writing anything telecom-y I would use Erlang but seems its days are behind us. I wonder if it's just too expensive to hire and train people in it when everyone knows Go/Java/Python already, or if it's more the idea that other ecosystems have sprung up to replace it e.g. K8s.
I've heard that they don't use Erlang at all except for test suites, and I've read rumors that it was mostly politics from C++ people who succeeded in making it so.
Is their business affected by the drop in demand that typically accompanies recessions? I am asking because I honestly have no idea; I don't know anyone who has bought anything from Ericsson in over a decade.
> I don't know anyone who has bought anything from Ericsson in over a decade
In 2021, Ericsson held the largest % market share in radio access network equipment and software [1] (that's what your mobile phone speaks to over the air)
That means that you likely do know of companies that have purchased significant volumes of products from Ericsson, although the statistical probability of this fact deviates depending on what country you live in.
They are an exclusively business-to-business company and their customers are major telecoms. I would guess the whole telco market is not affected much generally, especially not one more link down the chain. I already have trouble believing people use mobile networks less in a recession (or pay for them less by a considerable degree) and telecoms mainly pay Ericsson for goods and services to provide a certain capacity, which I also have no reason to believe would go down.
Let's stand together to support those impacted by Ericsson's layoffs. We must prioritize compassion and action to help those affected find new opportunities and rebuild their livelihoods.
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> Oh no. Since a large part of many medium-large sized tech companies' management style seems to consist of "copy what Amazon and Google are doing", I am scared of what silly decisions in other companies this might inspire.
I feel that my model of Ericssons upper management has been validated with one more data point, which is one reason why I would not be all that bummed if it turns out to hit me.
Layoffs in response to an economic uncertainty/slowdown were not invented by Amazon/Google/Meta/Musk. They're as old as economy is.
For this tech received very special treatment, colossal P/E, a shower of investment, all in an attempt to grab a slice of this wildly growing pie.
But almost every exponent in reality is a bottom part of an S-curve. The growth was indeterminate, not infinite. As growth stalled or reversed, the special treatment did not exactly stop, but its extent contracted severely. Questions about actual profitability started to arise, for instance.
And seeing the support we got in several times via the union fellows in the European countries I have worked on, is also a reason why I am quite supportive of them.
Source? Most of the layoffs I've seen have been poorly planned and hastily implemented.
Telecom equipment sales is often very cyclic.
To note further, Ericsson, Nokia et al, shouldn't be thought of as IT companies in the same vein as Google, Apple and Facebook. They exist in a very different parallel universe.
This prompted me to think, is Nokia still around? Then I looked it up and:
> In 2020, Nokia employed approximately 92,000 people[6] across over 100 countries, did business in more than 130 countries, and reported annual revenues of around €23 billion.[4]
Ok, that was surprising.
https://en.wikipedia.org/wiki/Microsoft_Mobile
As a startup trying to get going with Sync.Us, rebranding to https://www.sync.com really helped us take off.
Thanks to whomever auctioned that off :-)
If you mean they're not as prevalent as they were, sure I suppose. But they sold the business unit off again to HMD Global, who still make Nokia phones, such as the '3.4', the Android One (which is what led me to it - reasonably stock and years of updates - I previously had a Motorola for the same reason) device I'm typing this comment from.
While Ericsson did not disclose which geography would be most affected, analysts had predicted that North America would likely be most affected and growing markets such as India the least.
The cost cutting will continue until profits improve.
March 2022: 55.06B
June 2022: 62.46B
Sept. 2022: 68.04B
Dec. 2022: 85.98B
Dec. 2022: 7% profit margin, 11.36B operating income, 1.6B net change in cash on hand, 50.32B cost of revenue
Beat revenue in four consecutive quarters, all while dealing with IPR agreements and DOJ provisions. Sales up YoY and full year.
"A dividend for 2022 of SEK 2.70 (2.50) per share will be proposed to the AGM by the Board of Directors."
https://www.ericsson.com/en/press-releases/2023/1/ericsson-r...
A year ago they had 17.3% profit margin, that’s a massive drop that I imagine spurred this decision.
https://www.ericsson.com/en/press-releases/2022/1/ericsson-r...
I mean, they don't need VC money. Why be in SF.
It’s more anti-non-NATO rather than anti-foreign.
But if Ericsson drops all its US staff, I could see them getting lumped in with the likes of Huawei anyway.
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Regarding the lay-offs - telecom industry is essentially a sinewave. The "good" period (e.g. from 5G prototype to complete network migration to 5G) lasts approximately 5 years. The way contracts are signed means that you sell X number of network nodes (base stations, core nodes, etc) and some kind of support contract to go with it. After that, there is nothing. Very different from public cloud providers where you pay as you go. Ericsson and most telecom vendors still haven't figured out how to monetize this.
https://companiesmarketcap.com/largest-companies-by-number-o...
Erlang was created, at Ericsson, for a telephony switch.
It's shuttered the consumer side entirely (Sony Ericsson was a joint venture, not a group), it's one of the lead developers in mobile telephony, as well as the lead IP holder in the domain.
In Europe also a large player in the broadcast space, though Red Bee Media (formerly Ericsson Broadcast and Media Services): BBC, Channel 4, ITV, Canal+, as well as Channel 4 and Channel 5's VOD. RBM is also a huge provider of closed captioning, signing, and audio description worldwide, by far the largest in europe for more than 15 years (after they acquired Mundovisión and Titelbild).
Dead Comment
Not sure how much of it ended up happening, after all the layoffs in Germany a couple of years ago.
https://news.ycombinator.com/item?id=18142526
No, nm, they didn't. They are doing it just because.
It's getting pretty comical by now if there weren't people involved.
In 2021, Ericsson held the largest % market share in radio access network equipment and software [1] (that's what your mobile phone speaks to over the air)
That means that you likely do know of companies that have purchased significant volumes of products from Ericsson, although the statistical probability of this fact deviates depending on what country you live in.
[1] https://telecom.economictimes.indiatimes.com/news/ericsson-b...