6 ms·

Ericsson is reportedly planning to cut 25,000 jobs in response to crisis

101 points by scrpn 9y ago

geodel 9y ago
As the article mentions European employees are mostly safe, in north America they have already cut 7000. So the upcoming layoffs will mostly be in Asia. I guess competition with Samsung/Huawei is brutal and it is losing market share.
- NKosmatos 9y ago
  I didn't see such statement in the original article from https://www.svd.se/nytt-omfattande-sparpaket-pa-gang-i-ericsson-brutalt https://www.svd.se/nytt-omfattande-sparpaket-pa-gang-i-erics... On the contrary, it's stated that "...there are far-reaching plans to centralize several of the European markets to reduce costs by reducing the number of employees." The bad thing with companies of such a big size (IBM, Nokia, Siemens..) is that there is always a lot of people to layoff. Ericsson has to find it's own way through these troubled and quickly changing times. There are many areas such as Virtual Network Functions, Internet of Things, Hyperscale Datacenter System and many others which are being heavily worked upon and I think will give some good results.
  - geodel 9y ago
    In general I feel the world today needs far less workers and particularly fewer workers with college degrees. I can see in my own case 8 years back there were 12 people in team and now just 2. Slowly product got stable and people left for other opportunities and positions were filled for short time or never filled. But from business perspective this application is working just fine with few fixes here and there. There is no brand new next-gen replacement that would need scores of developers.
    - rpazyaquian 9y ago
      I agree. Our need for more workers, both unskilled and skilled, is starting to plateau. We don't actually know how to deal with that[1], and people are starting to get antsy as opportunities become less and less common. [1]Well, we do, but nothing that's implemented on a large scale yet.
    - 201708throw 9y ago
      Cheaper mediocre developers can do the maintenance basically. The creative ones would get bored anyway - why keep them around.
    - jonas21 9y ago
      I don't really see how the example of a product team going from 12 people to 2 supports the case that the world needs fewer workers. Most products go through a cycle where you need a lot of people to develop them at first, then they stabilize and require fewer people, and the other people move on to different products. You can't just look at one product or team in isolation -- as long as there are new products to be built, there will be a need for those workers.
      - geodel 9y ago
        I agree anecdote is not sufficient. I wanted to extend my experience as national or worldwide trend, may be that is not the case. But when I read increasingly frequent layoffs at all major IT vendors (IBM/HP/Oracle/Capgemini/Tata/Infosys/Cognizant and many more ) I tend to think it is general trend. New products will be built always but with multilayered designs, more and more functionality is going in libraries/frameworks in lower layers. So a new product started today will not need as many developers. Again I am not arguing about the general quality of such product but new developments are using fewer developers than past.
        pm90 9y ago
        So my view of the layoffs at the big "IT Vendors" is simply that the tasks which they originally hired workers for became increasingly automated or moved to systems that were less labor intensive. A lot of the workers in India, for one example, worked on things you would hardly call programming. e.g. creating charts from data, manually moving data from db to db etc. These kinds of tasks should have (IMO) been automated in the first place, and should not require full time employees to handle them. As the automation become more mature, stable and well adopted, the bigger vendors start using them and don't require fleets of humans to manage them anymore. For a concrete example, I think ansible (and related tools) probably "destroyed" thousands of jobs as you didn't need to manage bash scripts manually etc. There is another fleet of people who are hired simply for maintaining, developing on legacy systems, people you wouldn't find in the US. e.g. COBOL programmers.
- jamesblonde 9y ago
  Ericsson are pumping money into the Valley to have a presence there - https://www.ericsson.com/thinkingahead/the-networked-society-blog/2016/10/11/ericsson-experience-center-opens-in-santa-clara-in-the-heart-of-silicon-valley/ https://www.ericsson.com/thinkingahead/the-networked-society... Engineers cost twice what they cost here in Stockholm. Then the Sponsorships in the Valley - Berkeley AmpLab. IMO, much of that is wasted. They want to build a halo effect, but are failing miserably. You can survive (and even thrive) outside the valley.
  - eric_b 9y ago
    We see this in the Midwestern part of the US too. I've worked at several large Midwestern companies who created a Silicon Valley presence so they could "innovate" or "disrupt", or whatever. None of those satellite offices have worked out, and were all a huge waste of money. It turns out that unless you're one of the big tech giants, or a super cool startup, you will not be hiring the best in SV. And you'll be paying for the privilege. Most of these companies are now learning that Midwest based employees are just as good as their SV counterparts, and cost a whole lot less.
    - pm90 9y ago
      As always, it depends. I do see your point, and no doubt there are companies that don't understand how the market in the Valley really works and are bound to lose money. But there are also companies that get it right. e.g. I used to work at Rackspace, which is headquartered in San Antonio, Texas, but they do have a (smaller) office in San Francisco as well. The people I worked with in that office were pretty damn smart (IMO, maybe my expectations are low). Smart engineers evaluate opportunities based on hard facts rather than "oh cool its a cool startup with ping pong in the office!" etc. I don't know why this image is so common when so many of the smartest people I've worked with have not been swayed by it as much as objectively assessing the cold, hard facts as to: what they would be doing, who would they be working with, what sort of impact can they have, etc.
    - seanp2k2 9y ago
      The other side to that is that people in tech who know they're good come to the Valley because they can get 2-5x the pay. It doesn't hurt that California is beautiful and has a lot of other nice qualities (weather, being the epicenter of the tech scene, close to the ocean and the mountains). Sure, it's true that we don't have a monopoly on good engineers, but for many, once they realize that they're undervalued in their current position (so, a "good deal" for companies), they might try to get a huge raise, get denied, then move to the valley. That's generally how it works, and it works pretty well. Despite the stupidly high cost of living and salaries, companies in the valley still manage to do alright. For employees, layoffs at one company aren't really a problem, since every other company is always hiring. It only becomes a problem when the whole sector is in trouble, which we haven't seen in a while. Hopefully things are diversified enough by now that e.g. AdTech failing wouldn't mean layoffs like the dot-com bust. Given how many areas rely on technology and the internet these days, I see another dot-com bust as decreasingly likely -- not that it couldn't happen, but I think it's more tied to the overall economy vs one sector in the corner. If biotech runs into trouble, VR/AR probably wouldn't be affected much. If payment tech gets disrupted, silicon design shouldn't dip much, etc etc.
warrenm 9y ago
Dagbladet!
Exuma 9y ago
Well, I just started learning Erlang... hopefully this doesn't affect that D;
- ramchip 9y ago
  The article makes it sound like that team would not be affected: "However, the 14,000 employee-strong Swedish work force is to stay intact – at least all R&D engineers."
- oneweekwonder 9y ago
  if you look at the latest release[0] there seems to be 33 contributors. While a bunch of the commits is made by Erlang/OTP(I assume this is Ericsson) it is not the 1990 anymore and a lot of tech like rabbitmq and couchdb uses erlang to reach "webscale" deployments. [0]: https://github.com/erlang/otp/compare/OTP-20.0...master https://github.com/erlang/otp/compare/OTP-20.0...master
  - devmunchies 9y ago
    > tech like rabbitmq and couchdb and a whole sub-community in elixir. erlang is gonna be just fine.
  - ramchip 9y ago
    Almost all these commits are from Ericsson employees. The community did start contributing bigger things in later years (the improved unicode support is a good example), but the core team is still very central to the development, and their main bug tracker is not open.
- toast0 9y ago
  The current release wouldn't turn into a pumpkin, even if Ericsson stopped supporting it tomorrow. Even the older releases continue to work. :)
bhouston 9y ago
Is Ericsson going to eventually lose to the Chinese competition? What is Ericsson's advantage over Chinese firms?
- pm90 9y ago
  Patents, R&D and not being at risk of being spied upon by back doors installed by the Chinese Govt.
TorKlingberg 9y ago
I used to work for Ericsson R&D, so I am sad to see this, especially for my previous colleagues. There are some very sharp and dedicated engineers there. At least this cut seems to mostly affect Managed Services. That is the division that basically manages telcos networks for them. It was a big growth area a couple of years ago, but turned out to be very low margin. Ericssons fundamental problem is that their only customers are the telecom operators, and the telcos aren't going to invest in infrastructure unless they have to. 4G rollout is mostly done in developed nations, and 5G is just a buzzword at the moment. Even if Ericsson invents some amazing technology that improves the end users experience, it doesn't mean they will make much money from it. Of course the price pressure from Chinese competitors has not helped, even if Ericsson has held on to its marketshare.
- toomuchtodo 9y ago
  > At least this cut seems to mostly affect Managed Services. That is the division that basically manages telcos networks for them. It was a big growth area a couple of years ago, but turned out to be very low margin. Is it possible these telcoms will hire some of these Ericsson Managed Services folks to run their networks? I mean, someone has to manage the network.
  - heisenbit 9y ago
    At least in theory these networks have become more efficient to manage. For example the fixed and mobile networks often share the same core these days. Also likely Ericsson had to promise efficiency gains when taking over the business. Last but not least as a network equipment provider Ericsson has more interest in managing the networks and maintaining a big footprint than making profit from doing so. Their core business is selling equipment.
- pm90 9y ago
  This is kinda distressing. I'm mostly all for free trade, but the impression I have is that Chinese competitors undercut Ericcson by not paying for patents. If that is the case, would it make sense to sanction those Chinese companies that do it, and thus take their products off the market in the developed countries? (Please correct me if my assumptions are wrong)
eggpy 9y ago
>“Right now, Ericsson is hiring engineers to repair the damage that earlier saving packages caused. It’s crucial that most of all the Swedish R&D department remains somewhat protected. They are the ones who will come up with the new solutions that will drive sales in the long term,” said a person with insight into the process. This is something I have seen at prior companies. Still hiring to fix issues from previous overly-ambitious cutbacks. Seems like execs could learn from this...

101 points by scrpn 9y ago

As the article mentions European employees are mostly safe, in north America they have already cut 7000. So the upcoming layoffs will mostly be in Asia. I guess competition with Samsung/Huawei is brutal and it is losing market share.

NKosmatos 9y ago
I didn't see such statement in the original article from https://www.svd.se/nytt-omfattande-sparpaket-pa-gang-i-ericsson-brutalt https://www.svd.se/nytt-omfattande-sparpaket-pa-gang-i-erics... On the contrary, it's stated that "...there are far-reaching plans to centralize several of the European markets to reduce costs by reducing the number of employees." The bad thing with companies of such a big size (IBM, Nokia, Siemens..) is that there is always a lot of people to layoff. Ericsson has to find it's own way through these troubled and quickly changing times. There are many areas such as Virtual Network Functions, Internet of Things, Hyperscale Datacenter System and many others which are being heavily worked upon and I think will give some good results.
- geodel 9y ago
  In general I feel the world today needs far less workers and particularly fewer workers with college degrees. I can see in my own case 8 years back there were 12 people in team and now just 2. Slowly product got stable and people left for other opportunities and positions were filled for short time or never filled. But from business perspective this application is working just fine with few fixes here and there. There is no brand new next-gen replacement that would need scores of developers.
  - rpazyaquian 9y ago
    I agree. Our need for more workers, both unskilled and skilled, is starting to plateau. We don't actually know how to deal with that[1], and people are starting to get antsy as opportunities become less and less common. [1]Well, we do, but nothing that's implemented on a large scale yet.
  - 201708throw 9y ago
    Cheaper mediocre developers can do the maintenance basically. The creative ones would get bored anyway - why keep them around.
  - jonas21 9y ago
    I don't really see how the example of a product team going from 12 people to 2 supports the case that the world needs fewer workers. Most products go through a cycle where you need a lot of people to develop them at first, then they stabilize and require fewer people, and the other people move on to different products. You can't just look at one product or team in isolation -- as long as there are new products to be built, there will be a need for those workers.
    - geodel 9y ago
      I agree anecdote is not sufficient. I wanted to extend my experience as national or worldwide trend, may be that is not the case. But when I read increasingly frequent layoffs at all major IT vendors (IBM/HP/Oracle/Capgemini/Tata/Infosys/Cognizant and many more ) I tend to think it is general trend. New products will be built always but with multilayered designs, more and more functionality is going in libraries/frameworks in lower layers. So a new product started today will not need as many developers. Again I am not arguing about the general quality of such product but new developments are using fewer developers than past.
      - pm90 9y ago
        So my view of the layoffs at the big "IT Vendors" is simply that the tasks which they originally hired workers for became increasingly automated or moved to systems that were less labor intensive. A lot of the workers in India, for one example, worked on things you would hardly call programming. e.g. creating charts from data, manually moving data from db to db etc. These kinds of tasks should have (IMO) been automated in the first place, and should not require full time employees to handle them. As the automation become more mature, stable and well adopted, the bigger vendors start using them and don't require fleets of humans to manage them anymore. For a concrete example, I think ansible (and related tools) probably "destroyed" thousands of jobs as you didn't need to manage bash scripts manually etc. There is another fleet of people who are hired simply for maintaining, developing on legacy systems, people you wouldn't find in the US. e.g. COBOL programmers.
jamesblonde 9y ago
Ericsson are pumping money into the Valley to have a presence there - https://www.ericsson.com/thinkingahead/the-networked-society-blog/2016/10/11/ericsson-experience-center-opens-in-santa-clara-in-the-heart-of-silicon-valley/ https://www.ericsson.com/thinkingahead/the-networked-society... Engineers cost twice what they cost here in Stockholm. Then the Sponsorships in the Valley - Berkeley AmpLab. IMO, much of that is wasted. They want to build a halo effect, but are failing miserably. You can survive (and even thrive) outside the valley.
- eric_b 9y ago
  We see this in the Midwestern part of the US too. I've worked at several large Midwestern companies who created a Silicon Valley presence so they could "innovate" or "disrupt", or whatever. None of those satellite offices have worked out, and were all a huge waste of money. It turns out that unless you're one of the big tech giants, or a super cool startup, you will not be hiring the best in SV. And you'll be paying for the privilege. Most of these companies are now learning that Midwest based employees are just as good as their SV counterparts, and cost a whole lot less.
  - pm90 9y ago
    As always, it depends. I do see your point, and no doubt there are companies that don't understand how the market in the Valley really works and are bound to lose money. But there are also companies that get it right. e.g. I used to work at Rackspace, which is headquartered in San Antonio, Texas, but they do have a (smaller) office in San Francisco as well. The people I worked with in that office were pretty damn smart (IMO, maybe my expectations are low). Smart engineers evaluate opportunities based on hard facts rather than "oh cool its a cool startup with ping pong in the office!" etc. I don't know why this image is so common when so many of the smartest people I've worked with have not been swayed by it as much as objectively assessing the cold, hard facts as to: what they would be doing, who would they be working with, what sort of impact can they have, etc.
  - seanp2k2 9y ago
    The other side to that is that people in tech who know they're good come to the Valley because they can get 2-5x the pay. It doesn't hurt that California is beautiful and has a lot of other nice qualities (weather, being the epicenter of the tech scene, close to the ocean and the mountains). Sure, it's true that we don't have a monopoly on good engineers, but for many, once they realize that they're undervalued in their current position (so, a "good deal" for companies), they might try to get a huge raise, get denied, then move to the valley. That's generally how it works, and it works pretty well. Despite the stupidly high cost of living and salaries, companies in the valley still manage to do alright. For employees, layoffs at one company aren't really a problem, since every other company is always hiring. It only becomes a problem when the whole sector is in trouble, which we haven't seen in a while. Hopefully things are diversified enough by now that e.g. AdTech failing wouldn't mean layoffs like the dot-com bust. Given how many areas rely on technology and the internet these days, I see another dot-com bust as decreasingly likely -- not that it couldn't happen, but I think it's more tied to the overall economy vs one sector in the corner. If biotech runs into trouble, VR/AR probably wouldn't be affected much. If payment tech gets disrupted, silicon design shouldn't dip much, etc etc.

warrenm 9y ago

Dagbladet!

Exuma 9y ago

Well, I just started learning Erlang... hopefully this doesn't affect that D;

ramchip 9y ago
The article makes it sound like that team would not be affected: "However, the 14,000 employee-strong Swedish work force is to stay intact – at least all R&D engineers."
oneweekwonder 9y ago
if you look at the latest release[0] there seems to be 33 contributors. While a bunch of the commits is made by Erlang/OTP(I assume this is Ericsson) it is not the 1990 anymore and a lot of tech like rabbitmq and couchdb uses erlang to reach "webscale" deployments. [0]: https://github.com/erlang/otp/compare/OTP-20.0...master https://github.com/erlang/otp/compare/OTP-20.0...master
- devmunchies 9y ago
  > tech like rabbitmq and couchdb and a whole sub-community in elixir. erlang is gonna be just fine.
- ramchip 9y ago
  Almost all these commits are from Ericsson employees. The community did start contributing bigger things in later years (the improved unicode support is a good example), but the core team is still very central to the development, and their main bug tracker is not open.
toast0 9y ago
The current release wouldn't turn into a pumpkin, even if Ericsson stopped supporting it tomorrow. Even the older releases continue to work. :)

bhouston 9y ago

Is Ericsson going to eventually lose to the Chinese competition? What is Ericsson's advantage over Chinese firms?

pm90 9y ago
Patents, R&D and not being at risk of being spied upon by back doors installed by the Chinese Govt.

TorKlingberg 9y ago

I used to work for Ericsson R&D, so I am sad to see this, especially for my previous colleagues. There are some very sharp and dedicated engineers there. At least this cut seems to mostly affect Managed Services. That is the division that basically manages telcos networks for them. It was a big growth area a couple of years ago, but turned out to be very low margin. Ericssons fundamental problem is that their only customers are the telecom operators, and the telcos aren't going to invest in infrastructure unless they have to. 4G rollout is mostly done in developed nations, and 5G is just a buzzword at the moment. Even if Ericsson invents some amazing technology that improves the end users experience, it doesn't mean they will make much money from it. Of course the price pressure from Chinese competitors has not helped, even if Ericsson has held on to its marketshare.

toomuchtodo 9y ago
> At least this cut seems to mostly affect Managed Services. That is the division that basically manages telcos networks for them. It was a big growth area a couple of years ago, but turned out to be very low margin. Is it possible these telcoms will hire some of these Ericsson Managed Services folks to run their networks? I mean, someone has to manage the network.
- heisenbit 9y ago
  At least in theory these networks have become more efficient to manage. For example the fixed and mobile networks often share the same core these days. Also likely Ericsson had to promise efficiency gains when taking over the business. Last but not least as a network equipment provider Ericsson has more interest in managing the networks and maintaining a big footprint than making profit from doing so. Their core business is selling equipment.
pm90 9y ago
This is kinda distressing. I'm mostly all for free trade, but the impression I have is that Chinese competitors undercut Ericcson by not paying for patents. If that is the case, would it make sense to sanction those Chinese companies that do it, and thus take their products off the market in the developed countries? (Please correct me if my assumptions are wrong)

eggpy 9y ago

>“Right now, Ericsson is hiring engineers to repair the damage that earlier saving packages caused. It’s crucial that most of all the Swedish R&D department remains somewhat protected. They are the ones who will come up with the new solutions that will drive sales in the long term,” said a person with insight into the process. This is something I have seen at prior companies. Still hiring to fix issues from previous overly-ambitious cutbacks. Seems like execs could learn from this...