Ericsson CEO Hans Vestberg steps down

Ericsson has announced the resignation of long-serving CEO Hans Vestberg, effective immediately, as the company seeks to transform to adapt to changing market dynamics.

Vestberg has also stepped down as president and as a member of the board of directors, but remains “at the company’s disposal” for a six month term of notice, the company announced.

Executive vice president and CFO Jan Frykhammar will take the role of interim CEO until a permanent replacement is found.

Vestberg has been with Ericsson for 28 years and has been serving as CEO for the last seven. But he has been facing pressure to step down as the company struggles with profitability in a period of slowing demand and intense competition.

Last week the company reported a 24% decline in second-quarter net profit, along with an aggressive cost reduction plan aimed at turning around the company’s operations.

“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,” Ericsson chairman Leif Johansson commented.

“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.”