From: Business Insider, Nordic, July 25, 2016
by Vilhelm Carlström
Ericsson, the world's leading provider of telecoms network infrastructure, announced today that CEO Hans Vestberg would step down with immediate effect.
The announcement follows on weeks of turmoil for Ericsson. It was recently revealed that the CEO of Ericsson, Hans Vestberg and other Ericsson executives had received improper salaries and spent hundreds of thousands of dollars on trips, writes Veckans Affärer. Ericsson has subsequently on made headlines for being investigated on suspicions of corruption in China, and for involvement in an arms deal in Greece.
At the same time, the company has been announcing big lay-offs in the struggle to improve profitability.
Ericsson's board of directors voted unanimously to replace Hans Vestberg as CEO of the company.
"Given the current state of the market and the increasing tempo in the execution of the company's strategy, the Board of Directors has decided that the time is right for a new leader to drive the next phase in Ericsson's development," said Chairmand of the Board, Leif Johansson in a press statement.
The decision will come into effect immediately, but Vestberg will remain at the company for six months to support the board and the interim CEO during a transitional period.
Bloomberg observes that the decision to replace Vestberg also follows upon four quarters of disappointing results. But that being said, Ericsson stock did reach its highest level in seven years last april. Hans Vestberg's tenure as CEO lasted for six-and-a-half years.
"Now that the industry is entering a new phase, driven by 5G, IoT [internet of things] and Cloud, it's time for a new CEO to step in and continue the work of securing Ericsson's lead in the industry," comments Hans Vestberg in the press statement.
Bloomberg suggests that Hans Vestberg's leadership may not have been visionary enough for these changing times, noting that while Nokia is betting on the future with the daring acquisition of Alcatel-Lucent, Ericsson's partnership with Cisco Systems seems pretty modest.
While it is true that Ericsson is currently the industry leader, Nokia and Huawei are offering competition.