For years, telecoms giants such as Ericsson have operated in cycles driven by the promise of the next generation of networks. But Q4 2025 results suggest that the Swedish company is entering a new era – one in which success is no longer determined by 5G mast coverage, but by absolute cost efficiency and financial engineering.
Under Börje Ekholm’s leadership, the company has undergone a transformation from a growth-focused supplier to an entity focused on generating cash for shareholders. This strategy is bearing fruit. Despite a global slowdown in 5G infrastructure investment, Ericsson beat analysts’ expectations, reporting an adjusted EBIT of SEK 12.26 billion. For a market that had expected results almost 20% lower, this sends a clear signal: restructuring is working.
A cool calculation of resources
However, the price of this stability is high. Ekholm leaves no illusions about the future of the employment structure. After cutting 5,000 jobs last year, the company is preparing the ground for further cuts, including 1,600 positions in Sweden alone. It’s a classic move from the lean management playbook – adapting the cost base to the reality that telecoms operators in the US and Europe are cutting back on capital expenditure.
The improved cash position, bolstered by the sale of the Iconectiv unit, allowed for a bold gesture to investors. A 15 billion kroner share buyback programme and a dividend increase are moves designed to retain capital at a time of market uncertainty.
A geopolitical opportunity
While the market in North America remains stagnant, Ericsson’s eyes are on Brussels. The European Commission’s proposals to exclude ‘high-risk’ suppliers could open up space previously occupied by Chinese competitors for the Swedes and Finland’s Nokia. Although CFO Lars Sandström tones down the enthusiasm, calling these changes a long-term process, for investors this is a key factor for growth in the medium term.
