After struggling to keep sales up during the ramp up to 5G networks, Ericsson on Monday announced that CEO Hans Vestberg is stepping down.
Vestberg is immediately stepping down as president, CEO, and a member of the board of directors. CFO Jan Frykhammar will assume the CEO position while the company searches for an official replacement.
With 4G networks already built out in the US and China -- and strong competition from the likes of Huawei and Nokia -- Ericsson for the past year has posted disappointing earnings results. The Swedish communications equipment maker last year sought to boost its revenues with a wide-reaching deal with Cisco, which set the companies up to collaborate in areas ranging from Internet of Things devices to core networks and the enterprise IT cloud. However, Nokia's merger with Alcatel-Lucent demonstrated how Ericsson could've taken more dramatic steps to adjust to the market.
"As the industry enters a next phase, driven by 5G, IoT and Cloud, it is time for a new CEO to step in and continue the work to ensure Ericsson's industry leadership," Vestberg said in a statement.
Ericsson chairman of the board Leif Johansson said in a statement that "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."
Last week, the company announced it would lay off employees after a 24 percent decline in second quarter net profits.