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tiffanyh

> 7% profit margin [in 2022]

A year ago they had 17.3% profit margin, that’s a massive drop that I imagine spurred this decision.

https://www.ericsson.com/en/press-releases/2022/1/ericsson-r...

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Oh no, our mythical infinite growth is growing slightly less quickly.

Absolutely bananas thinking.

I mean I agree with you in principle but that doesn't change the fact that as a CEO you are in danger of losing your job if margins compress that much and you don't make a show of doing something about it. Keeping margins up is kind of important if you want to be able to invest in new products and markets and survive as a company into the next generation.

Edit: I was talking about the comment above me conflating wanting higher margins with belief in infinite economic growth. I wasn't making a statement about the morality of Ericsson layoffs nor do I have any insight on their financials. I was simply observing that margins seem to be a thing that investors care quite a bit about.

> if margins compress that much and you don't make a show of doing something about it.

Isn’t the layoff them showing they are doing something about their margin compression?

I truly don’t mean my comments to come across harsh. That’s not my intent and realize families will be harmed by jobless. But there’s not much a company can do to cut costs quickly to boost margins other than layoffs.

Yes, it's crazy, and yet this is how it's supposed to function. Boggles the mind. Solid healthy profits have little value, and companies are forced to think short term rather than long

I don't know about infinite, but Ericsson is in the networking space, and there is plenty of work remaining to be done in that space. In the US, cell service is pretty mediocre, and 5G is still rolling out in major cities. I still routinely find gaps in coverage, or find myself in a populated area with very slow coverage. And this is a developed country, not even speaking of many many countries around the world still building out their networking infrastructure. I suspect this is actually accelerating as many developing countries have experienced good growth in the last few decades.

There may come a time when we hit some kind of steady state, but we're definitely not close now.

As noted in my link, "primarily due to business mix change in Networks and previously announced charges for contract exits and portfolio adjustments in Cloud Software and Services".

If they took that hit and missed significantly on revenue, a layoff wouldn't be as unexpected. To take that hit and then beat on revenue, both quarterly and YoY, and then kick off an 8% layoff, is just corporations being corporations for the sake of it.

> To take that hit and then beat on revenue

Revenues don’t mean anything though.

I could generate huge revenues by selling $100 gift cards for 80 bucks. But I’ll have no profit to show for it.

If their profitability was cut in 1/2 in just 1-years time, it's actually irresponsible for management to not take actions to get costs/margins under control.

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