Vestberg out as Ericsson CEO

Hans Vestberg, whose tenure as president and CEO of Ericsson (NASDAQ:ERIC) has led to disappointing financial performance, has stepped down, the company's board of directors announced today. Executive Vice President and CFO Jan Frykhammar will replace Vestberg on a temporary basis until the company hires a new CEO.

Carl Mellander, currently vice president and group treasurer will serve as acting CFO.

Ericsson revealed July 19 a series of cost cutting measures after its fiscal year second quarter showed an 11% year-on-year decline in revenues and a 26% decline in net income. These measures were on top of a previously announced cost reduction scheme.

The downbeat quarter was one of a series of hiccoughs that led some major shareholders to call for Vestberg's ouster. Nevertheless, the board took a conciliatory tone in announcing the move.

"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," said Chairman of the Board Leif Johansson via a press release.

"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," he added. "As stated in the report the Board fully supports the cost reduction plans. In addition, the Board supports the company business strategy and new company structure," Johansson continued.

Johansson also noted that Frykhammar has said he is not interested in turning the temporary CEO duties into a permanent position.

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