Ericsson CEO Hans Vestberg steps down with immediate effect

Swedish mobile telecoms gear maker Ericsson's Chief Executive Hans Vestberg has stepped down with immediate effect, the company said on Monday.

Vestberg, who has been CEO since 2010, has come under fire in recent months, with Swedish media questioning his leadership and pay, particularly after weak quarterly results in April sent its share price down 15 percent in a single day.

Hans Vestberg. Reuters

Hans Vestberg. Reuters

The CEO's departure comes days after the company reported that like-for-like sales had declined for a seventh consecutive quarter.

Chief Financial Officer Jan Frykhammar will be acting CEO, with group treasurer Carl Mellander as acting CFO, while the company searches for Vestberg's successor.

Last week, Ericsson forecast a third consecutive year of comparable sales declines, saying it would step up cost cuts in the face of deteriorating market conditions after its results fell short of market expectations.

With demand stagnating in developed markets where the newest networks have mostly already been built, Ericsson has been feeling an additional pinch from lower spending in countries such as Russia, Brazil, the Middle East and Nigeria, hit by weaker currencies and low oil prices.

For the past couple of years, Ericsson has been forced to cut its outlook for market growth, weighed down by sluggish demand for its core mobile network base stations. It also has a weaker position than rivals Nokia and Huawei in faster growing areas such IP-based communication.

During April-June, like-for-like sales dropped by 7 percent, the seventh in a row of declining underlying sales. However, Vestberg had told a conference call it didn't appear that Ericsson was losing market share.

In 2015, group sales fell 5 percent on a comparable basis after declining 2 percent in 2014.

Updated Date: Jul 25, 2016 13:11 PM

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