News
Finance chief Jan Frykhammar takes reins on interim basis as Swedish kit maker struggles for momentum.
Ericsson CEO Hans Vestberg stepped down effective immediately on Monday, following a difficult first half for the Swedish kit maker.
Finance chief Jan Frykhammar has been named acting CEO until a permanent replacement is found. The company said its search will consider internal and external candidates. Meanwhile, group treasurer Carl Mellander has taken on the role of acting CFO.
"In the current environment and as the company accelerates its strategy execution, the board of directors has decided that the time is right for a new leader to drive the next phase in Ericsson’s development," said Ericsson chairman Leif Johansson, in a statement.
Vestberg had been under pressure to find new momentum, amid ongoing declines at Ericsson’s two biggest divisions, networks and services.
Last week, after Ericsson posted an 11% fall in second-quarter group sales, the company doubled its cost savings target and said cuts would be made in R&D investments in intellectual property.
This came after a major restructuring plan was announced in April aimed at creating a leaner, more agile organisation. Vestberg revealed at the time that he had not been satisfied with the pace of growth and profitability at Ericsson in recent years.
Johansson said on Monday that the board still backs the savings plan and new company structure.
"I have had 28 fantastic years at Ericsson, the last seven as CEO. 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," said Vestberg.
Vestberg made headlines early on; in 2009, as CEO-elect he famously predicted that mobile connections would reach 50 billion in 2020. Last year, Ericsson revised down its prediction to 26 billion.
As well as his bold forecasting, Vestberg’s tenure will also be marked by the decision by Ericsson in late 2011 to sell its 50% stake in handset joint venture Sony Ericsson to Sony for €1.05 billion.
He will also be remembered for the far-reaching strategic partnership Ericsson established with Cisco last November, which among other things sparked semi-regular and routinely-denied rumours that the two eventually plan to merge.
"Hans has been instrumental in building strong relationships with key customers around the world and his leadership and energy have been an inspiration to employees and leaders across Ericsson," Johansson said.
Vestberg will take on an advisory role at Ericsson for the next six months. He has also resigned from Ericsson’s board.
This story was updated at 09:20 to include more background.
