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Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) CEO, Hans Vestberg, has been ousted out of office following investigations and a drop in revenue and profit. Vestberg stepped down after being CEO for six and a half years. He did so immediately and the company is currently looking for a replacement. The company stated in the current environment and with the company executing its strategy, the board of directors saw it fit for a new leader to head the company towards this new phase.

Dealing with losses and competition

Ericsson is definitely facing hard times ahead. They have to do a tremendous balancing act of dealing with competition from Nokia Oyj and Huawei Technologies Co. there is also the issue of cutting jobs. The company has disclosed that they will be increasing cost cuts. This should not come as a surprise following four consecutive quarters of losses.

Vestberg’s departure brings about many questions about his tenure with allegations of corruption in Europe and Asia. There were also reports in Swedish media saying that the company might have inflated their sales. This was done possibly having revenues booked prior to invoicing clients. According to the news the company might have inflated the sales figures to 5.9%. During Vestberg’s tenure the shares went down by 4% even though he had promised to improve the company’s profitability.

Board decision and challenges

According to Leif Johansson, the Ericsson chairman, the board’s decision was unanimous. Johansson added that they had been having the discussion in the past weeks so when it came to voting, no surprise was expected. Vesterberg started business units that were to deal with enterprise and media markets and hence invested in 5G wireless technology. He did not make major moves like Nokia.

Ericsson is facing the same challenges that were seen with the Alcatel Lucent and Nokia merger.

Vestberg joined Ericsson in 1991 after business school. From 2003 to 2007 he was head of the company’s global division. This was after serving in different capacities in China, Chile, Brazil and Sweden. He then became CEO in October 2007.

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Steve Kanaval
Steve Kanaval: Portfolio Manager/Writer/ Market Analyst Steve began his career in the Trading Pits in Chicago making markets at the Chicago Mercantile Exchange (NYSE:CME) the Chicago Board of Trade and the CBOE in the early 80’s. He ran the Morgan Stanley Derivative Prop Trading for the firm specializing in Index Arbitrage. He continued his career as a Trader/Portfolio Manager for multiple Hedge Funds during the Internet Boom of the 90’s managing large portfolios. Steve is known as an expert in MicroCap Technology Stocks and the emerging Digital Currency markets as a Portfolio Manager for his Family Office. Steve has managed portfolio’s in volatile asset classes for 3 decades as a commodity trader, hedge fund manager and digital currency trader and miner. Steve publishes his views on the asset classes in a public forum and has published more than 10,000 articles simplifying these complex and volatile assets for readers. His work is published on multiple sites including Bloomberg, Equities.com, Hacked.com, CryptoCurrencyNews as a paid contributor. His work includes research, journalism and archived video on important market volatility related to stocks, digital currency and other volatile misunderstood asset classes. He offers a humorous, unique insight and the related back stories and drivers for readers interested in volatility and emerging market assets. Full disclosure Steve is long 25 digital currencies and sits on the board of multiple public companies involved in digital currencies, and owns shares in these companies from time to time.