Ericsson moved a step closer to fulfilling U.S. Department of Justice (DoJ) requirements tied to a 17-year long bribery scandal involving high-ranking government officials, the falsification of financial documents by the telecommunications equipment vendor and the possibility that funds were diverted to a terrorist organization.

The Sweden-based company reported that an independent compliance monitor appointed by the DoJ has certified Ericsson's anti-corruption compliance program as having “satisfied requirements” and “functioning effectively.” That certification is a condition for Ericsson to fully meet the DoJ requirements and work toward fully removing the compliance program by June 2.

“This certification is an important and independent verification of Ericsson’s significant progress in strengthening its compliance and controls since entering into the 2019 DoJ settlement,” Jan Carlson, chairperson of Ericsson’s board of directors, noted in a statement. “This marks a positive step towards completion of the monitorship, which the company expects at the same time as the expiration of the term of the plea agreement, upon fulfillment of the remaining obligations of that agreement.”

Ericsson has been operating under this compliance program since mid-2020 as part of a $1.06 billion settlement the previous year with the DoJ. That settlement came after a six-year investigation by the DoJ and Securities and Exchange Commission (SEC) that found Ericsson had bribed government officials in six countries and filed false financial records.

Ericsson at that time claimed the criminal activities ended in the first quarter of 2017 and it fired 50 people in 2018 following an internal investigation. Current Verizon CEO Hans Vestberg led Ericsson between 2010 and mid-2016 — or six months prior to when these activities were alleged to have stopped — when he abruptly resigned following several underperforming quarters. Vestberg was at Ericsson for 19 years and replaced by current Ericsson CEO Börje Ekholm.

Ericsson violated that initial agreement in 2022 when it admitted to multiple incidents of bribery and corruption in Iraq between 2011 and 2018. Most damning of all, the company at that time said it couldn’t unequivocally deny that bribes paid by some employees during that period ended up in the hands of the Islamic State terrorist group.

Ekholm at that time admitted to a continued pattern of “hugely embarrassing” and “unacceptable misconduct” from the vendor.

“There are parts that can be substantiated and there are parts that cannot be substantiated. And the question on financing armed factions cannot be substantiated,” Ekholm said during a press conference with journalists and financial analysts at that time.

That admission resulted in a new investigation by the SEC. Ericsson early last year pled guilty to charges that failed to provide information related to a previous settlement with the DoJ and SEC, and agreed to pay an additional $206 million in fines.

Ericsson plagued by operational challenges Ericsson’s step toward completing the compliance monitoring program comes on the heels of the vendor announcing plans to cut 1,200 jobs in Sweden as the telecommunications infrastructure giant prepares for a “challenging mobile networks market in 2024.”

The company said the cuts are part of its broader goal to bolster its beleaguered financial position, which it expects to be put under further near-term pressure due to “volume contraction as customers remain cautious.”

“This measure is part of the global initiatives to improve the cost position, including headcount reductions, while maintaining investments critical to Ericsson’s technology leadership,” the company explained in a statement. “Initiatives to increase operational efficiency will continue during 2024 but will not be announced separately.”

Ericsson said the “cost-saving initiatives” would also include eliminating some of its facilities, reducing work with consultants and streamlining processes.

All of this work is targeted at improving Ericsson’s growth trajectory and “long-term margin targets, through leadership in mobile networks and a focused expansion into enterprise.”

The latest cuts come a year after Ericsson announced plans to slash 10% of its workforce in Sweden, which was followed by an announced 8,500 job cuts across its global operation.