6 February 2003 Ericsson, the Swedish telecommunications equipment giant, today said that CEO Kurt Hellstroem will retire in April and be replaced by Carl-Henric Svanberg, a Swedish businessman renowned for cost-cutting and acquisition integration.
Hellstroem, who became president of Ericsson in 1999 and CEO at the beginning of 2001, will step down at the company’s annual meeting on 8 April after 18 years at the company. He will be 60.
During his time as CEO, Hellstroem trimmed the company’s massive workforce by about 40% but failed to stem mounting losses as debt-burdened operators cut investments in new networks.
Ericsson has posted a loss for nine successive quarters, despite its status as the world’s biggest supplier of telecoms networks and one of the leading handset manufacturers through its joint venture with Sony, the Japanese electronics giant.
Earlier this week its shares fell 20% after posting weaker-than-expected fourth-quarter earnings and saying it expected a further fall in sales in 2003.
“I will take over in hard but exciting times,” said Svanberg, the current CEO of Assa Abloy, the world’s leading lock maker. “I am humbled by the task but I have great confidence in Ericsson and its employees.”
Michael Treschow, Ericsson’s chairman, told today’s press conference that Svanberg will continue Hellstroem’s cost-cutting drive but gave few details about his other plans for the company.
“He will keep the same focus as Kurt Hellstroem, namely to make Ericsson return to profit, cut costs and strengthen our leading position. He has a technical background and is very interested in technology, which is important for Ericsson,” he said.
As a sign of his faith in the troubled company, Svanberg said he had bought about €10 million in Ericsson shares.