Telecommunications equipment manufacturer LM Ericsson Telephone (ERIC.US) plans to eliminate approximately 1,600 jobs in its home country of Sweden, marking a significant step in its broader strategy to reduce operational expenditures.

In a statement released on Thursday, Ericsson confirmed it has notified Swedish labor authorities and has initiated negotiations with relevant labor unions.

A company spokesperson indicated that Ericsson employs roughly 12,600 people in Sweden, meaning this workforce reduction will impact approximately 13% of its local employees; globally, the company has a total workforce of about 90,000.

The spokesperson further noted that additional "efficiency-enhancing measures" will be implemented at the group level, although these specific actions will not be announced separately.

Headquartered in Stockholm, Ericsson has been intensely focused on slashing costs and improving its profit margins for several years, a necessary response to the persistently weak telecommunications equipment market.

Similar to its Nordic rival Nokia (NOK.US), Ericsson has endured years of soft demand, primarily due to the delayed materialization of anticipated 5G technology spending by telecom operators.

In 2023, Ericsson announced a global headcount reduction program aimed at cutting 8,500 positions, which represented about 8% of its total workforce at the time.

The downsizing efforts have continued since then, with the company cutting hundreds of jobs in both Spain and Canada last year.

Following the divestiture of its call-routing business, Iconectiv, Ericsson's third-quarter profit last year more than doubled, surging to 15.8 billion Swedish kronor (approximately $1.67 billion).

The company is scheduled to report its fourth-quarter financial results on January 23rd.