By Sven Grundberg
STOCKHOLM--Swedish wireless networks giant Ericsson (ERIC) said
Thursday it is changing its organizational structure by dividing
its main networks unit into two.
The company said the networks unit, which accounts for roughly
half of overall revenue, will be divided into a radio unit, and a
cloud and internet protocol unit.
In a statement, Ericsson Chief Executive Hans Vestberg said the
move is an effort to recognize Ericsson's different market
positions within cloud and IP on the one hand, and radio technology
on the other.
"Radio is the foundation of Ericsson's technology leadership and
we are the undisputed market leader," Mr. Vestberg said. "In the
cloud and IP space...we have made significant progress but are
still a challenger," he added.
Ericsson said the two new units will be part of a new business
segment, Segment Networks, to keep existing synergies in research
and development, and ensure alignment in its product portfolio and
marketing.
The new organizational structure is expected to be completed
during the third quarter.
On Wednesday, Ericsson said its first-quarter revenue declined
9% in the first quarter to 47.51 billion Swedish kronor ($7.21
billion), its lowest quarterly revenue in over three years.
Write to Sven Grundberg at sven.grundberg@wsj.com; Twitter:
@svengrundberg
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