The Chairman of the Swedish telecommunications equipment maker Ericsson announced plans to step down before the next annual meeting of the company in 2018.
Shares of the company struggling with several problems lost nearly half their value over the past two years. For the first quarter of this year, Ericsson reported a loss of EUR 12.3 billion which led to a rethinking of strategy by the new CEO Borja Ekolm.
65-year-old Leif Johansson is Chairman of the company since 2011. He announced that the background of the new strategy to return to success and recent changes in ownership, it’s time to retire.
“It is normal to let the owners together to elect President, and well before that I announce that I will not be available for the next term,” said Johansson.
Activist investor Cevian Capital, which previously insisted on structural changes at companies like Volvo and Swedbank, bought a stake of more than 5% at Ericsson in recent months.
The company, which once dominated the market of telecommunications equipment, is struggling with its weakening position amid tough competition by offering cheaper products Chinese players such as Huawei, as well as Nokia, which is trying to expand its business model, so to include customers from the energy sector, transport and the media.
The wave of acquisitions could not promote the sales of Ericsson, and now Ekolm trying to shrink the group.
Commenting on his decision, Johansson said: “I have had the privilege to serve as chairman of the board since 2011. It has been an exciting but also challenging time. Börje Ekholm assumed the position as CEO in the beginning of the year and during the first quarter the company presented a new, more focused, business strategy. This strategy, which is supported by the board and the major owners, creates a solid foundation for realizing Ericsson’s full potential. The company now enters a new phase, with focus on execution, and we also have a new ownership constellation. It is natural to let the owners jointly propose a chairman and well ahead of this I want to announce that I will not be available for a next term”.