By MKPE ABANG
After persistently troubling times during which the company’s revenue remained in the red under his watch, Hans Vestberg, Chief Executive Officer of Ericsson, has been sacked. Vestberg was told, Monday July 25, to step down with immediate effect, the Swedish vendor, once the clear global leader in telecommunications network equipment, announced, citing obvious challenging marketing conditions.
Vestberg was appointed CEO of Ericsson on January 1, 2010, in what was expected to be the company’s rise to greater heights as he had been an insider person for a long time.
Vestberg has worked for Ericsson in China, Brazil, Mexico and the United States and was a founding member of the Broadband Commission for Digital Development, where he chairs the task group on the post-2015 development agenda.
During the years from 1998 to 2000 Vestberg was CFO for Ericsson in Brazil and 2000-2002, he was CFO for Ericsson in North America and controller for North and South America. During 2002-2003 he was President for Ericsson in Mexico. He also served as Chief Financial Officer for Ericsson from 2007 to 2009 before his ascension to the CEO position on January 1, 2010.
But like a fairy tale horribly told, Ericsson lost its leadership as the network equipment vendor in 2012 to Chinese vendor, Huawei, which then overtook the Swedish company and became the world’s largest telecommunications network equipment manufacturer and vendor. Ericsson’s sliding remained unchecked.
Ericsson has had to lay off thousands of workers this year in the face of a stagnant market for its products, and last week said it is still looking to drastically cut costs. Apparently one of its biggest problems could be that most operators are done rolling out the current generation of mobile broadband networks, known as 4G or LTE.
Thus, after another difficult quarter for the firm, Ericsson Chairman of the Boar Leif Johansson confirmed Vestberg’s departure, citing challenging operating environments and a change in strategic direction as a major contributing factor.
“In the current environment and as the company accelerates its strategic 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,” he said.
During a press briefing, Johansson suggested the change in strategic direction will focus heavily on Internet of Things (IoT) as a future channel for Ericsson.
“We will, with Jan (Frykhammar) and a new CEO, develop and refine strategy as it relates to the industry which is now developing with 5G, IoT and Cloud; and to bring back growth and value to Ericsson as we participate in the development of this industry,” he said.
While the search for a successor begins, CFO Jan Frykhammar has been placed in temporary charge.
While Johansson, the Ericsson’s chairman, pointed towards 5G, IoT and Cloud as growth areas, rival Huawei is experiencing sustained positive growth and continues to gain market share over its Northern European rivals, including Nokia.