Shares in Ericsson inched up Monday after the struggling broadband and mobile tech supplier announced that Hans Vestberg had stepped down as president and CEO effectively immediately.
Ericsson has named Jan Frykhammar, EVP and CFO, as interim CEO as it seeks a full-time replacement for Vestberg. Carl Mellander has been named activing CFO.
Vestberg is exiting as Ericsson’s profits and its stock price has slid under his watch while surging competitors, such as China’s Huawei, have seen a sharp increase in revenues, and as Ericsson has come under increased pressure from the recent combination of rivals Nokia and Alcatel Lucent. Under Vestberg, Ericsson formed a technology and business partnership with Cisco Systems aimed at helping both companies drive more scale and target next-generation networks.
Ericsson shares were up 9 cents (1.22%) to $7.45 each in mid-day trading Monday.
"Hans Vestberg has led the company for seven years through significant industry and company transformation,” Ericsson chairman Leif Johansson said in a statement. “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."
"I have had 28 fantastic years at Ericsson, the last seven as CEO,” Vestberg added. “As the industry enters a next phase, driven by 5G, IoT and Cloud, it is time for a new CEO to step in and continue the work to ensure Ericsson's industry leadership."
Interim CEO Frykhammar joined Ericsson 1991.