Swedish telecommunications equipment giant Ericsson has announced a new president and chief executive officer (CEO) in the latest bid to turn around its moribund business, appointing Carl-Henric Svanberg to the top post, effective April 8, 2003.
Ericsson's current CEO and president, Kurt Hellström, will be retiring, according to a statement released by the company. Hellström will turn 60 this year, a common retirement age in Sweden.
Svanberg was named CEO by Ericsson's board of directors on Thursday. He has been serving as the CEO of leading Swiss lock maker Assa Abloy and has no prior experience in the telecom industry.
However, the 50-year-old Swede has a reputation as a strong and strategic manager in his tenure as CEO at Assa Abloy.
Svanberg has been at the helm of Assa Abloy since its spin-off from Swedish security company Securitas Sverige in 1994. During that time he grew the company at a rate of more than 30 per cent annually and acquired more than 100 companies, turning Assa Abloy into a leading provider of locking technology.
At Ericsson, Svanberg will be expected to keep the company's ongoing restructuring plan on track, keeping costs under control while continuing to trim the company's size. Ericsson said that it hopes to outsource many of its IT operations and cut staff levels to around 60,000 employees worldwide by the end of the year. The company reported that it employed 64,621 people at the end of 2002.
Investors will also be looking to Svanberg to turn around Ericsson's mobile handset business, which has fallen behind that of competitors Nokia and Motorola.
The investment community had grown frustrated with the company's inability to wring more profits out of the handset business, especially given the continued dim outlook for a pickup in spending amongst telecommunications infrastructure companies.
In interviews, Hellström had cast doubt on some of the company's recent investments in the handset arena, such as a joint venture with Sony, to produce the T300 colour-screen phone, a multimedia handset with an attachable camera that can play high-speed downloadable games.