Ericsson CEO Hans Vestberg stepped down after six and a half years at the helm of the Swedish telephone equipment maker, a period marked by a falling stock price, intense competition and investigations into the company’s business dealings in Europe and Asia.
Vestberg stepped down immediately, according to an Ericsson statement on Monday. Chief financial officer Jan Frykhammar will be CEO until a replacement is found.
“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,” the company said.
Vestberg’s departure caps a turbulent period for Ericsson, which is cutting jobs while battling fierce competition from from Huawei and Nokia.
The company said last week it would accelerate cost cuts after reporting disappointing results.
Vestberg has faced questions on probes into alleged corruption in Asia and Europe, and last week the company rejected a report in Swedish media that it may be inflating sales by booking revenue before some clients are invoiced.
With much of the so-called fourth-generation networks already built in the US and China, Vestberg had vowed to improve profitability, but the stock has declined since reaching a more than seven-year high in April last year. Vestberg had carved out new business units targeting media and enterprise customers to get back to growth.
Vestberg, a career Ericsson manager who joined the company straight out of business school in 1991, headed its global service division from 2003 to 2007 after having held various positions for the company in China, Sweden, Chile and Brazil. He was named chief financial officer in October of 2007 and replaced Carl-Henric Svanberg as CEO at the start of 2010.
Earlier this yer, Ericsson’s second biggest shareholder, Industrivaerden, was unusually candid in its critique of the mobile network manufacturer, saying its shares had underperformed in the face of market changes.
Through vote-heavy A shares, Industrivaerden and its associate Svenska Handelsbanken control more than 42% of the votes in Ericsson together with largest shareholder Investor AB, the holding company of Sweden’s Wallenberg family. — (c) 2016 Bloomberg LP
- Reported with assistance from Adam Ewing