Tech

Elaine He oversees Bloomberg Gadfly's data visualization work in Europe and also pursues her own columns combining business and markets coverage. Before joining Bloomberg, she was a graphics editor at the Wall Street Journal and the New York Times.

Ericsson plans to eliminate 3,000 jobs in Sweden as the maker of telecommunications equipment belatedly tries to reduce costs.

Gadfly has written before about the Swedish company's deep-seated problems before here. After it resisted starting the kind of deep cost-cutting program Nokia and Alcatel undertook several years ago, the company finally embarked on one this year. The company ousted its CEO in July and plans to eliminate 9 billion kronor ($1.05 billion) a year by 2017.

These charts show the horrible scale of Ericsson's problem. First off, Ericsson's payroll has ballooned over the past five years, according to data compiled by Bloomberg.

Swollen Ranks
Ericsson's workforce has increased in the last decade
Source: Bloomberg
Note: 2016 figure is as of the second quarter

The second shows how revenue per employee has slid. 

Declining Efficiency
Sales per employee have slipped as the number of employees increases
Source: Bloomberg
Note: 2016 figure is as of the second quarter

And this shows how Ericsson's gross margin has been squeezed. The path to efficiency looks long and tortuous.

Under a Microscope
Ericsson's gross margins are closely watched by investors
Source: Bloomberg

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Elaine He in London at ehe36@bloomberg.net

To contact the editor responsible for this story:
Edward Evans at eevans3@bloomberg.net