Telecommunications equipment firm Ericsson is looking for a new CEO, after current chief Hans Vestberg stepped down Monday with immediate effect.
Ericsson (ERIC) has had to lay off thousands of workers this year in the face of a stagnant market for its products, and last week said it is still looking to drastically cut costs. Its biggest problem is that most operators are done rolling out the current generation of mobile broadband networks, known as 4G or LTE.
The next generation, so-called 5G, doesn’t exist yet—everyone agrees that it’s supposed to be faster and more reliable, and there’s a general hope for a roll-out around 2020, but the underlying technical standards have not been established, so no-one can build anything yet.
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Ericsson said Monday that Vestberg, who led the Swedish firm for seven years, would be replaced in the short term by chief financial officer Jan Frykhammar.
“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,” board chairman Leif Johansson said in a statement.
“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.”
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Johansson also noted that the board supports the cost reduction plans Vestberg announced on July 19. Vestberg “remains at the company’s disposal” during his six-month notice period.
Ericsson’s new acting CFO is group treasurer Carl Mellander. Frykhammer has been with Ericsson since 1991, and has been CFO and executive vice president for the last seven years.
The company’s share price fell by around a quarter so far this year, though it jumped more than 5% on the news of Vestberg’s departure.