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Technology

Ericsson’s North American HQ in Plano to Be Impacted by Cuts

Hans Vestberg approved cost-reducing measures before stepping down as global CEO.
By Danielle Abril |
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Jan Frykhammar
Jan Frykhammar

Ericsson said its North American headquarters in Plano will be impacted by cost-cutting measures Hans Vestberg approved before stepping down from his role as CEO of the global company.

The tech giant has not yet announced exactly how its North American headquarters will be affected, but confirmed Monday that all of Ericsson’s regions will feel the impact. It is expected to release additional details in the coming weeks.

Stockholm, Sweden-based Ericsson on Monday announced the departure of Vestberg, who has served in the top role for seven years, stating that it needed a new leader to “drive the next phase” of development. The news comes after the company produced lackluster profit and revenue for its fourth straight quarter, continuing to create mounting investor doubt, according to Bloomberg.

Jan Frykhammar, Ericsson’s CFO and executive vice president, will serve as the acting CEO, effective immediately, while the company searches for a permanent successor. Carl Mellander, vice president and group treasurer, will serve as the acting CFO.

“I have had 28 fantastic years at Ericsson, the last seven as CEO,” Vestberg said in a release. “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’s departure comes in conjunction with a cost-savings plan the CEO and his management team recently developed and released on July 19 during its second-quarter earnings announcement. The plan already has been initiated and includes reducing research and development investments in IP and removing duplications within product development. The plan is expected to save the company SEK 9 billion, or $1.04 billion, during 2017.

Vestberg once worked out of the North American headquarters in Plano, serving as CFO for the region. During that time—from 2001 to 2002—he reported to Angel Ruiz, the president and CEO of Ericsson’s North American headquarters.

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