Swedish mobile telecoms gear maker Ericsson ousted Hans Vestberg as chief executive on Monday, a move led by major shareholders after months of criticism of Vestberg’s leadership and pay. Today, the company announced his immediate departure, remarking that “the time is right for a new leader to drive the next phase in Ericsson’s development”.
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Executive vice-president and chief financial officer (CFO), Jan Frykhammar, will replace Vestberg on an interim basis until a successor is named, with Ericsson initiating a recruitment process that will look at external and internal candidates.
Frykhammer confirmed to the Chairman of the Board that he does not wish to take on the role permanently. Carl Mellander, now group treasurer at the firm, will act as CFO in Frykhammar’s stead.
Vestberg has been under pressure in recent weeks in the light of a falling share price and lower-than-expected profits.
The search is on for a new exec who will have to tackle a number of issues, most notably reinvigorating revenues after a period in which like-for-like sales have fallen for seven consecutive quarters.
During April-June, like-for-like sales dropped by 7 percent, the seventh in a row of declining underlying sales.
Vesterberg is an Ericsson veteran with 28 years of service, the last seven of which were spent as its chief executive.
“As stated in the report the Board fully supports the cost reduction plans”.
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A new company structure was implemented on 1 July to “accelerate strategy implementation, to mirror customer ways of working and increase end-to-end accountability for business owners”, according to Ericsson’s statement. “As the industry enters a next phase, driven by 5G, IoT and Cloud, it is time for a new CEO to step in and continue the work to ensure Ericsson’s industry leadership”, Hans Vestberg said.
