Ericsson’s ouster of President and CEO Hans Vestberg today came as a surprise for many industry watchers. Just a few years ago, Vestberg was considered a shining star in the tech industry and was even rumored to be courted for the top job at Microsoft to replace departing CEO Steve Ballmer.
However, after several quarters of struggling earnings, highlighted by a second-quarter 2016 decline of 24 percent in net profits, Ericsson announced that Vestberg is stepping down immediately and is being temporarily replaced by Chief Financial Officer Jan Frykhammar until a permanent CEO is found.
Vestberg was well regarded by other telecom executives, particular the company’s operator partners. He vaulted the company to more prominence by conducting keynote addresses at several high profile industry events such as the Consumer Electronics Show and Mobile World Congress.
Vestberg also established himself as a visionary in the telecom field by advocating what he called the “Networked Society.” The Networked Society is the concept that connectivity fuels progress and that mobile broadband can help tackle some of the world’s biggest challenges such as poverty, health, education, and climate change.
But being a visionary isn’t enough, particularly in today’s challenging telecom climate. Here’s a timeline of some of the key wins and losses Ericsson experienced with Vestberg at the helm.
Jan. 1, 2010: Hans Vestberg becomes CEO of Ericsson, replacing Carl-Henric Svanberg, who left the company to become chairman of BP. Vestberg is a 19-year veteran of Ericsson.
Oct. 28, 2010: Sony Corp. agrees to buy Ericsson’s 50 percent stake in handset maker Sony Ericsson for $1.46 billion.
April 2, 2012: Ericsson buys WiFi networking gear specialist BelAir Networks, giving it access to carrier-grade WiFi technology.
April 8, 2013: Ericsson announces plans to purchase Microsoft’s Mediaroom unit for an undisclosed price, giving the company the ability to deliver TV services via broadband networks.
June 16, 2014: Bloomberg reports that Microsoft’s board is considering Vestberg as a potential successor to departing CEO Steve Ballmer.
Nov. 14, 2014: Ericsson announces it will implement an efficiency plan that will reduce costs and consolidate its IT portfolio. The program is expected to result in $1.2 billion in savings by 2017 and includes job cuts of approximately 2,200 globally.
Nov. 9, 2015: Ericsson and Cisco announced a strategic partnership in which they will share patents, develop products together, and align customer service across a broad customer base. The companies say the partnership will generate $1 billion in revenue for each side by 2018.
Dec. 21, 2015: Ericsson signs a seven-year cross-licensing agreement with Apple, putting an end to a multi-year patent spat that has plagued their relationship.
April 13, 2016: At Ericsson’s annual general meeting, Vestberg announces Ericsson has 21 5G operator deals.
April 21, 2016: Vestberg shakes up company’s corporate structure amid a drop in sales. Several executives leave the company including Jan Wäreby, head of sales; Anders Thulin, chief information officer; and head of the Asia-Pacific region, Mats Olsson.
July 19, 2016: Ericsson announces it will eliminate more jobs and reduce its research and development budget to compensate for a 24 percent drop in second-quarter net profits.
July 20, 2016: Swedish business daily Dagens Industri reports that Ericsson’s two largest shareholders are pushing to oust Vestberg as CEO.
July 25, 2016: Ericsson announces Hans Vestberg is leaving the company immediately.