-
New company structure to accelerate strategy
execution and improve performance
-
Focus on meeting changing customer requirements
and capture market opportunities to drive growth
-
Strong focus on cost and efficiency across
company
-
New business unit structure and appointments to
Executive Leadership Team
-
New organization effective July 1, 2016, and
from Q1, 2017 financial reporting to reflect new structure
Ericsson (NASDAQ:ERIC) today announced a series of
organizational and structural changes to strengthen strategy
execution to drive growth and profitability. Over the past number
of years Ericsson has made a number of key strategic decisions
designed to build new revenue areas and to drive efficiencies in
the core business. This includes exiting the handset and modems
businesses, an enhanced partnership strategy on IP, and investments
to build targeted growth areas with strong focus on software and
professional services.
Hans Vestberg, President and CEO, Ericsson, says:
"We are not satisfied with our overall growth and profitability
development over past years. We are today announcing further
actions to accelerate strategy execution and to drive efficiency
and growth across the company even harder. We will create a leaner,
more fit for purpose organization, to cater for the needs of
different customer segments and to faster capture market
opportunities. As 5G, the Internet of Things, and Cloud drive the
next phase of industry development, the time is just right to make
these changes."
Overall company strategy execution will be
strengthened through an organizational structure aligned around
type of customers and type of business. The new structure will have
five business units and one dedicated customer group for Industry
& Society, in line with the company focus on core business,
targeted growth areas and cost and efficiency.
Core business - Two Networks
business units, Business Unit Network Products and Business Unit
Networks Services, will focus on incremental improvements in
networks business performance, capturing opportunities in 4G and
extending leadership into 5G. The two business units will leverage
the combined strength in products and services with BU Networks
Services focusing on Managed Services, Network Roll-Out and
Customer Support and BU Network Products combining Radio and
Transport.
Targeted growth areas - The
two new IT & Cloud business units, Business Unit IT & Cloud
Products and Business Unit IT & Cloud Services, will together
with a new Business Unit Media, have a strong focus on profitable
growth as a natural next step after a period of investment. This
will involve focus on software sales and recurring business to
complement the already strong business in Consulting & Systems
Integration and the Broadcast Services business. For the rapidly
growing Industry & Society business a separate Customer Group
will be introduced to improve scaling and time to market.
Cost and efficiency - The
company remains fully committed to drive cost reduction and
efficiencies, including delivering on its SEK 9 b. net savings
efficiency program during 2017. The new organization is designed to
enhance efficiencies and cost structures through more end-to-end
accountability and less duplication across portfolios and
capabilities.
The new Group structure is optimized to bring both
enhanced customer value with business units having full
responsibility for business performance and end-to-end skills.
Regions are being re-shaped to mirror the new business units with
focus on sales and delivery quality. This will be complemented by
stronger global functions that can build scale in respective
areas.
Vestberg continues: "The changes we are making
will make it easier for our customers to do business with us,
whether they are an operator, a media company or from another
industry. The changes will also take into account the different
characteristics, needs, and pace of each of the businesses we are
in. I am convinced this will make us even more competitive and
enable us to grow both our company and our earnings".
The new organization will be effective as of July
1, 2016. As of Q1, 2017, financial reporting will be made according
to the new structure. The new organizational structure aligns
company reporting with strategy execution in a simpler and more
transparent way. Additional information on reporting will be
presented at the Capital Market Day on November 9, 2016, and
restated numbers will be presented at the beginning of 2017.
Effective July 1, 2016, the company will have the
following business unit structure:
Two business units focusing on the Networks
business:
-
BU Network Products, headed by Arun Bansal,
Senior Vice President, Head of Business Unit Network Products and a
member of the Executive Leadership Team (ELT)
-
BU Network Services, headed by Fredrik Jejdling,
Senior Vice President, Head of Business Unit Network Services and a
member of the ELT
Two business units focusing on the IT & Cloud
business:
-
BU IT & Cloud Products, headed by Anders
Lindblad, Senior Vice President, Head of Business Unit IT &
Cloud Products and a member of the ELT
-
BU IT & Cloud Services, headed by
Jean-Philippe Poirault, Senior Vice President, Head of Business
Unit IT & Cloud Services and a member of the ELT
Strengthened focus on new types of customers in
Media and Industries:
-
BU Media with central go-to-market model, headed
by Per Borgklint, Senior Vice President, Chief Innovation Officer,
Head of Business Unit Media and a member of the ELT
-
Customer Group Industry & Society with
central go-to-market model, headed by Charlotta Sund, Senior Vice
President, Head of Customer Group Industry & Society and a
member of the ELT
In addition to announcing a new company structure,
Ericsson today also announced appointments to the Executive
Leadership Team. For full information see separate announcement
published on www.ericsson.com
NOTES TO EDITORS
For media kits, backgrounders and high-resolution
photos, please visit www.ericsson.com/press
Ericsson is the driving force
behind the Networked Society - a world leader in communications
technology and services. Our long-term relationships with every
major telecom operator in the world allow people, business and
society to fulfill their potential and create a more sustainable
future.
Our services, software and
infrastructure - especially in mobility, broadband and the
cloud - are enabling the telecom industry and
other sectors to do better business, increase efficiency, improve
the user experience and capture new opportunities.
With approximately 115,000
professionals and customers in 180 countries, we combine global scale with technology and services
leadership. We support networks that connect more than 2.5 billion
subscribers. Forty percent of the world's mobile traffic is carried
over Ericsson networks. And our investments in research and
development ensure that our solutions - and our customers - stay in
front.
Founded in 1876, Ericsson has its
headquarters in Stockholm, Sweden. Net sales in 2015 were SEK 246.9 billion (USD 29.4 billion). Ericsson is
listed on NASDAQ OMX stock exchange in Stockholm and the NASDAQ in
New York.
www.ericsson.com
www.ericsson.com/news
www.twitter.com/ericssonpress
www.facebook.com/ericsson
www.youtube.com/ericsson
FOR FURTHER INFORMATION, PLEASE CONTACT
Ericsson Corporate Communications
Phone: +46 10 719 69 92
E-mail: media.relations@ericsson.com
Ericsson Investor Relations
Phone: +46 10 719 00 00
E-mail: investor.relations@ericsson.com
Ericsson discloses the information provided herein
pursuant to the Securities Markets Act and/or the Financial
Instruments Trading Act. The information was submitted for
publication on April 21, 2016, at 07:30 CET.
Ericsson accelerates transformation
to drive growth and profitability
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Ericsson via Globenewswire
HUG#2005398
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