Hans Vestberg, CEO of Ericsson for the last seven years, has stood down from the company with immediate effect, it was announced today (25 July 2016), although he will be available to support the Board and management for the next six months.
Jan Frykhammar, executive vice president and CFO, will assume the CEO position until the company can find a new CEO. Carl Mellander, currently VP & Group Treasurer, has been appointed acting CFO with immediate effect.
Reports emerged last week that two of Ericsson’s major shareholders, Investor and Industrivärden, were unhappy with the company’s Q1 and Q2 results and wanted Vestberg to go. As announced on 19 July, Ericsson’s second quarter results showed an 11% drop in revenue to SK54.1 billion (£4.7bn/€5.6bn) and a 26% drop in net income year-on-year from SEK2.1 billion (£185m/€221m) in 2015 to SEK1.6 billion (£140m/€168m).
At the time, Vestberg commented: “The negative industry trends from the first quarter have intensified impacting demand for mobile broadband, especially in markets with a weak macro-economic environment. We are delivering on ongoing cost reduction activities. However, in light of market development, management has, with the support of the Board of Directors, initiated significant actions to further reduce cost.”
Chairman of the Board Leif Johansson said: "Hans Vestberg has led the company for seven years through significant industry and company transformation. 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.
“However, 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."
Johansson added: "Jan Frykhammar has made it clear that he is not aspiring to permanently take on the CEO role. However, I am very pleased that he has accepted this assignment. Jan will secure continued strong execution and leadership in the current situation."
Vestberg said: "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."