Stockholm - Ericsson, a leading global telecommunications equipment manufacturer, has announced plans to lay off 8,500 employees worldwide in an effort to reduce costs.

The move, which is part of the company's larger cost-cutting strategy, is said to be the largest layoff in the telecom industry to date.

According to a memo from CEO Borje Ekholm, the reduction in headcount will be managed differently depending on local country practices. While the company has not disclosed which regions will be most affected, analysts predict that North America will likely bear the brunt of the layoffs due to slowing demand in the region.

The decision to cut jobs comes after Ericsson announced in December that it would aim to reduce costs by 9 billion crowns ($880 million) by the end of 2023 due to sluggish demand in some markets, including North America. The company has stated that it will achieve these savings by reducing consultants, real estate, and employee headcount.

Ericsson's Chief Financial Officer, Carl Mellander, explained that the layoffs were necessary to remain competitive in the market. "It is our obligation to take this cost out to remain competitive," he said in a statement. "Our biggest enemy right now may be complacency."

The announcement of the layoffs has come as a surprise to many, as the telecom industry had been largely unaffected by the economic downturn caused by the COVID-19 pandemic. However, Ericsson has seen a slowdown in orders due to many telecom companies building up their inventories during the height of the pandemic.

Despite Ericsson's layoffs, its Nordic rival, Nokia, has not announced any plans to reduce its workforce.