Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) is now on the hunt for a new CEO after relieving Hans Vestberg from the position.
The decision to remove Vestberg from the position was made by the company’s board who stated that he should step down with immediate effect. The former CEO was ousted from the leadership position because he was unable to steer the firm to a turnaround during his time at the helm. The company’s revenues and profits also dipped during his time as the CEO. Ericsson released a statement about Vestberg’s stepdown stating that Jan Frykhammar will temporarily take over the leadership position until a more permanent replacement is found.
Vestberg has been Ericsson’s CEO for six and a half years. The company has laid off thousands of employees because its products have been facing a difficult and stagnant market. A report released by the firm about a week ago stated that the company is still planning to significantly reduce costs. One of the company’s major problems is that most mobile operators have completed their rollout of the current generation of LTE broadband networks.
Leif Johansson, the Chairman of Ericsson’s board stated that Hans played a very pivotal role in cementing strong bonds between the company and its customers around the world. He also stated that the former CEO has inspired many of the people that the company has employed.
The statement released by the firm stated that Ericsson is currently trying to speed up its strategy execution. It also added that the board of directors has decided that it is the high time new leadership takes over so as to steer the company through the next phase of development. Ericsson has had a lot of success dealing with 4G networks. However, the slowdown caused by saturation has been affecting the performance of the company.
The next step for the firm is not yet clear since 5G networks have not yet been developed. The next generation of networks are expected to be significantly faster than the current networks. Tests are currently being done and analysts believe that rollout will commence in 2020.
