Ericsson President and CEO Hans Vestberg has stepped down from his role with immediate effect, as the company continues to seek to reduce costs and adapt to the current market environment.

Jan Frykhammar, the company’s Executive Vice President and CFO, takes the CEO position on an interim basis until a replacement is found. Carl Mellander, currently VP and Group Treasurer, has been appointed as acting CFO.

Ericsson said Vestberg will continue to support the Board and management team as he serves his six-month notice period.

Leif Johansson, Chairman of the Board at Ericsson, said: “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.”

Just a fortnight ago, Vestberg said at the company’s s Q2 results announcement the board had approved further action to cut costs, after net profits were SEK1.6 billion (€168.6 million) for the second quarter. Ericsson is seeking savings of SEK9 billion (€948.2 million) during 2017.

The company restructured the business in April in a bid to slash overheads.

Johansson said: “As stated in the report the Board fully supports the cost reduction plans. In addition, the Board supports the company business strategy and new company structure.”

Ericsson said it would consider both internal and external candidates for CEO.

Johansson added: “Hans Vestberg has led the company for seven years through significant industry and company transformation. Hans has been instrumental in building strong relationships with key customers around the world and his leadership and energy have been an inspiration to employees and leaders across Ericsson.

Vestberg said: “I have had 28 fantastic years at Ericsson, the last seven as CEO. 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.”

The company’s new acting CEO Frykhammar joined Ericsson 1991, and has held various positions in finance and business control. In 2009, he became Executive Vice President, CFO and Head of Group Finance. Prior to this, he was Head of the company’s Global Services business unit.

Johansson said: “Jan has made it clear that he is not aspiring to permanently take on the CEO role. However, I am very pleased that he has accepted this assignment. Jan will secure continued strong execution and leadership in the current situation.”

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