Ericsson Names New CEO Amid Dwindling Demand -- 4th Update
27 October 2016 - 1:31AM
Dow Jones News
By Matthias Verbergt
STOCKHOLM-- Ericsson AB named Börje Ekholm as its new chief
executive Wednesday, as the struggling Swedish telecom-equipment
provider looks to turn around its business amid waning demand and
stiff global competition.
Mr. Ekholm, a member of Ericsson's board over the past 10 years,
joins Ericsson's executive team from his position as CEO of
Patricia Industries, a division within Investor AB, a Swedish
investment company that is Ericsson's largest shareholder,
controlling over 20% of its voting rights.
Mr. Ekholm, 53 years old, will replace acting CEO Jan Frykhammar
on Jan. 16 and will remain a member of the Ericsson board.
Ericsson had been looking for a new CEO since it ousted Hans
Vestberg in July, as the company is battling slowing demand for its
cellphone towers and switches and faces fresh competitive threats
from China's Huawei Technologies Co. and Nordic rival Nokia
Corp.
Last week, Ericsson reported it plunged to a third-quarter loss,
hit by slower spending by mobile-service providers on
latest-generation, or 4G, networks, as many mobile-broadband
projects were completed last year.
Leif Johansson, chairman of Ericsson's board of directors, said
the company picked Mr. Ekholm about two months ago because of his
background in technology and telecommunications as well as previous
CEO experience at listed companies.
But the succession process dragged out, in part because Mr.
Ekholm, who has both Swedish and American citizenship, insisted on
continuing to live in the U.S.
"For me, it was a prerequisite," Mr. Ekholm said in an
interview, adding that managing Sweden's flagship tech company from
across the Atlantic would be "odd."
Analysts questioned Mr. Ekholm's ability to turn the company
around given his decade-long tenure as a board member, alleging the
role makes him partly responsible for the company's decline.
"It's a relevant question and clearly a consideration," Mr.
Ekholm said, stressing however the differences between his future
and current role in the company.
Mr. Ekholm said he would aim to make Ericsson profitable again
by prioritizing parts of its business while divesting others, but
he wouldn't make hasty decisions.
"For me to enter like a cowboy saying it should be this or that
way, I think it's just not the right way," he said.
Earlier this month, the company said it would cut 3,000 jobs in
Sweden, as part of a global restructuring program aimed at saving
10 billion kronor ($1.12 billion) in annual operating expenses by
the second half of 2017, compared with 2014.
Write to Matthias Verbergt at Matthias.Verbergt@wsj.com
(END) Dow Jones Newswires
October 26, 2016 10:16 ET (14:16 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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