Ericsson posts profit decline: Final quarterly report under Ekholm

Causes: Component costs and weak 5G demand

The backdrop to the business development is a years-long weak demand from network operators for telecommunications equipment. The once-anticipated investments in the expansion of 5G networks have largely failed to materialize, the company stated. Ericsson had already responded in the current year with a comprehensive savings program, eliminating around 5,000 positions worldwide.

The workforce reduction plans are also set to continue in the coming year. For 2026, Ericsson announced a further reduction in spending without providing concrete figures. Industry observers view this as an attempt to stabilize profitability despite the challenging market environment.

Savings program and job cuts

The current quarterly report is the last under Ekholm's leadership. After several years at the helm of the group, he will step down at the end of September. His designated successor Per Narvinger will then take over as CEO. The transition takes place against the backdrop of a difficult market environment and an ongoing austerity course.

The results were received critically by the financial markets. Deutsche Bank AG had already rated Ericsson with a "Hold" on April 23, 2025. Bernstein Research classified the stock as "Underperform" on January 23, 2026. Both ratings reflect analysts' skepticism regarding the company's short-term recovery.

Leadership change: Ekholm hands over to Narvinger

In addition to cost pressure, geopolitical and industry-specific risks are also weighing on the business. Ericsson has had to contend in recent years with a series of incidents that have weighed on investor and customer confidence. Designated CEO Narvinger is therefore taking office at a time when both the operational and strategic realignment of the group is pending.

The business performance of the entire industry remains under pressure. Other manufacturers of telecommunications equipment are also struggling with weak investment willingness among network operators. Ericsson is attempting to assert itself against competitors through cost discipline and price adjustments.

Outlook: Pressure across the industry

The planned CEO change is evidently associated by the company with a fresh start. While Ekholm's tenure focused primarily on stabilization work, Narvinger will face the task of returning the company to a growth course and setting the course for the period after the 5G rollout.

The coming quarters will show whether the announced savings measures and price adjustments take effect. Investors will pay particular attention to margin development and the order situation in the network equipment segment. Until then, Ericsson remains under pressure.