Ericsson’s CEO and president Hans Vestberg has been forced to resign effective immediately as Executive V.P and CFO Jan Frykhammar takes on the role as CEO until search is successfully completed. The group’s treasurer Carl Mellander is appointed acting CFO
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.”
Ironically, Vestberg, who read the firm’s earnings report for the second quarter on July 19, with a strong action plan to significantly reduce cost and adapt to the current market environment was the one to face the axe even though he will be available to support the Board and management during his term of notice of six months.
Ericsson said last month it was facing a corruption probe in the US over an charge under Vestberg’s tenure. Vestberg has also faced questions about his use of a company jet to attend sports events and was recently appointed Sweden’s Olympic Committee (SOC) chair even as the firm saw an 11 percent drop in Q2 revenues and 26 percent drop in profits. Ericsson recently signed a networking systems partnership with competitor Cisco Systems while Nokia acquired its competitor Alcatel-Lucent which many says the board intepreted as Vestberg’s lack of foresight for the future of Ericsson.