Ericsson Cuts 1,200 Swedish Jobs Due to Falling Orders
Portfolio Pulse from Anusuya Lahiri
Ericsson (NASDAQ:ERIC) is laying off 1,200 employees in Sweden, 8.6% of its Swedish workforce, due to decreased demand and a cautious approach from mobile service providers. This is part of a broader cost-cutting strategy amid challenges in the European telecom equipment sector. The company had previously announced a pessimistic outlook for 2024 but expects a surge in the latter half due to a $14 billion agreement with AT&T Inc (NYSE:T). Ericsson's stock has gained 8% in the last six months, and exposure to Ericsson can be gained through IShares U.S. Digital Infrastructure And Real Estate ETF (NYSE:IDGT) and Defiance Next Gen Connectivity ETF (NYSE:FIVG).
March 25, 2024 | 4:06 pm
News sentiment analysis
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NEGATIVE IMPACT
Nokia, like Ericsson, faces challenges in the telecom equipment sector, impacting its financial outlook and workforce.
Nokia's mention alongside Ericsson in facing sector challenges suggests a negative short-term impact, especially given the adjustments to its financial outlook and workforce.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
NEUTRAL IMPACT
Ericsson is laying off 1,200 employees in Sweden due to decreased demand, reflecting broader sector challenges. The company anticipates a surge in H2 2024 from a $14 billion AT&T deal.
The job cuts indicate cost-cutting measures due to decreased demand, which could initially worry investors. However, the anticipated surge from the AT&T deal could offset negative impacts, leading to a neutral short-term outlook.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100
NEUTRAL IMPACT
Defiance Next Gen Connectivity ETF offers investment exposure to Ericsson, which is facing sector challenges but has a positive outlook due to a deal with AT&T.
FIVG's performance is influenced by Ericsson due to its inclusion in the ETF. The neutral outlook is based on Ericsson's current job cuts balanced by its future prospects.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEUTRAL IMPACT
Investors can gain exposure to Ericsson, which is undergoing job cuts and anticipates a future surge, through the IShares U.S. Digital Infrastructure And Real Estate ETF.
IDGT includes Ericsson in its holdings, so Ericsson's performance directly impacts the ETF. The neutral score reflects the balance between current challenges and potential future gains.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
POSITIVE IMPACT
AT&T's $14 billion agreement with Ericsson is expected to drive a surge for Ericsson in the latter half of 2024, indicating a positive partnership impact.
The $14 billion agreement between AT&T and Ericsson is a significant positive development for Ericsson, likely benefiting AT&T as well by enhancing its network capabilities.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 70