Ericsson replaces CEO Vestberg as it begins more cost cutting and focuses on IoT
Ericsson‘s (NASDAQ:ERIC) Board of Directors today announced that Hans Vestberg steps down as President and CEO and member of the Board of Directors of Ericsson with immediate effect.
Jan Frykhammar, currently executive vice president and chief financial officer, will assume the position of chief executive officer until a new CEO takes over.
The chairman of the Board, Leif Johansson says: “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.”
Hans Vestberg says: “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.”
The news follows the presentation on July 19 of its earnings report for the second quarter, in which Ericsson revealed a radical action plan. This is designed to significantly reduce costs and adapt the business to a changing market environment.
Johansson adds, “As stated in the report, the Board fully supports the cost reduction plans. In addition, the Board supports the company business strategy and new company structure.”
Effective immediately Jan Frykhammar, EVP and CFO, steps into the position as president and CEO until the recruitment search, which has already begun, has been concluded. As is customary, the search process will include both internal and external candidates.
Frykhammar joined Ericsson in 1991, and has held various positions in finance and business control. In 2009, he became EVP, CFO and head of Group Function Finance. Prior to that he was head of Business Unit Global Services. He holds a Bachelor of Business Administration and Economics from the University of Uppsala, Sweden.
Speaking about Frykhammar, Johansson comments: “Jan 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.”
As a result of Frykhammar’s appointment Carl Mellander, currently VP & Group Treasurer, is appointed acting CFO with immediate effect.
Hans Vestberg will be available to support the Board and management during his term of notice of six months.