The board of Ericsson decided “the time is right for a new leader to drive the next phase in Ericsson’s development”, with incumbent CEO, Hans Vestberg, leaving immediately.
Vestberg is available to support the board and management during his six month notice period.
No immediate successor was named but the search is on, including both internal and external candidates. Last week former Ericsson exec Anders Runevad was mooted as a possible successor.
In the short term, Vestberg is being replaced by Jan Frykhammar, CFO, while Carl Mellander, VP & Group Treasurer, is appointed acting CFO.
A media report last week said the company’s two largest shareholders had united on deciding it was time for change at the top.
Ericsson’s Q2 results were poor, with an 11 per cent fall in net sales and a 26 per cent plunge in net income. Also announced were further cost cutting measures, including redundancies.
It had become unclear how Vestberg, who had held the top spot for seven years, was engineering a turnaround, with results not providing much encouragement.
Still, there might be some surprise about timing. A theory last week was the board would let Vestberg carry out difficult cost cutting rather than leave that unpopular task to a newcomer.
Pushing through these changes will now fall to Frykhammar, at least for the moment.
Vestberg, who faced some criticism in the Swedish media for his renumeration and corporate spending, will receive compensation worth SEK28 million ($3.2 million), said Svenska Dagbladet. In total, he worked for the Swedish vendor for 28 years.