Ericsson ousted CEO Hans Vestberg less than a week after the company posted a 26 percent year-over-year drop in net sales during the second quarter.
Ericsson initiated a search for a new CEO following the announcement on Monday that Hans Vestberg has been removed from the top role at the Sweden-based vendor with immediate effect, although he will remain available to the company for a period of six months.
Ericsson's two largest shareholders are reportedly pushing to oust CEO Hans Vestberg just one day after the company posted a 26 percent year-over-year drop in net sales during the second quarter.
Although carriers including AT&T and Telefonica have boasted of their progress toward virtualized, software-defined networks, the overall wireless industry remains in the very early stages of this transition, said Ericsson CEO Hans Vestberg.
Wireless carriers across the globe, including in the United States, are moving more quickly than expected toward 5G network technology, according to the CEO of Ericsson, the world's largest wireless equipment vendor.
Ericsson said it will continue to cut jobs after it posted an 11 percent year-over-year drop in net sales during the second quarter and a hefty 26 percent slide in net profit. And some of those jobs will be in the U.S.
Ericsson announced a corporate restructuring that includes business units dedicated to the IT and cloud sectors, news that comes alongside a reshuffled management team and relatively sluggish first quarter results.
Ericsson CEO Hans Vestberg reiterated that 4G and 5G technologies are key to the vendor's strategy for 2016, but noted that the company needs to begin reaping the rewards of recent investments in fields including software.
Nokia CEO Rajeev Suri said Ericsson and Cisco's partnership to resell each other's products and services and jointly develop new ones means that Nokia was right to purchase rival Alcatel-Lucent for $16.6 billion (€15.6 billion). Nokia also commenced its formal share offer to buy Alcatel-Lucent's outstanding shares and drive the merger toward completion early next year.
Ericsson and Cisco's partnership to resell each other's products and services and jointly develop new ones could generate well more than the $1 billion each in revenue by 2018 that the vendors have projected, according to senior executives at the firms. Meanwhile, John Chambers, Cisco's executive chairman and former CEO, indicated that he thinks Nokia's deal to acquire Alcatel-Lucent is likely to fail, something Nokia dismissed.