
Ericsson is reportedly planning to cut 25,000 jobs in response to crisis - scrpn
http://nordic.businessinsider.com/ericsson-is-reportedly-planning-to-cut-25000-jobs-in-brutal-response-to-crisis-2017-8/
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TorKlingberg
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.

~~~
pm90
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)

~~~
thephyber
I don't disagree with China playing fast and loose with IP, but those actions
wouldn't happen in a vaccuum.

China has WTO trade laws that protect them until a court case makes the
connection between intentional IP violations and the unfair trade competition.
Even after that is established (which can take many years), China can assert a
counter-action using WTO rules to find whatever trade laws those same
western+developed countries are violating.

Steve Bannon just talked about this in an unscripted interview for a
newspaper. If it happens, pain will ratchet up for everyone involved. It will
take a decade or more for all of the ripples of this type of trade war to
calm. Until then, ratcheting up of tariffs will make it far more expensive to
live in any country involved.

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geodel
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.

~~~
jamesblonde
Ericsson are pumping money into the Valley to have a presence there -
[https://www.ericsson.com/thinkingahead/the-networked-
society...](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/)

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
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.

~~~
seanp2k2
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.

~~~
stouset
Your first point rings extremely true from my own experience. It's of course
the case that there are bright, talented, and experienced engineers in places
other than the Bay Area, but it's hard to counter the brain drain that occurs.
The best engineers who remain become comparatively rarer and so it becomes
progressively more difficult to build a _team_ of seasoned engineers as
opposed to having a single veteran try and mentor six or seven inexperienced
coworkers.

And in that scenario, you're extremely vulnerable to that senior employee
getting burnt out from spending most of their time doing code reviews and
putting out fires rather than building things themselves. You're also
vulnerable to that person getting an enticing offer from a big-name company in
the valley or an exciting-sounding startup in SF. Many of these opportunities
are even remote, so this can happen even when your best employees don't have
any desire to move.

So yeah, it's possible to find good talent in other locales. But there's a lot
more competition for that talent, it's hard to build a critical mass of it
when the best employees are constantly moving away, and there are a ton of
challenges you have to deal with as a result.

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

~~~
oneweekwonder
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)

~~~
ramchip
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.

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eggpy
>“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...

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

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

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warrenm
Dagbladet!

