Ericsson Unveils Sweeping Changes In Its Management Structure
A WALL STREET JOURNAL ONLINE News Roundup
STOCKHOLM -- Telefon AB L.M. Ericsson AB Friday announced sweeping changes in its management structure to focus on its five largest customers in the face of an international market downturn.
The Stockholm-based company named Per-Arne Sandstroem to the new role of chief operating officer in charge of a revised product and service structure based on five units for large global customers.
"Our new organization will put even more emphasis on serving our customers, reduce complexity and more efficiently apply our resources," Chief Executive Kurt Hellstroem said.
The global customer units will be focused on five large customers: Vodafone Group PLC, France Telecom SA, Deutsche Telekom AG, Telefonica SA and Telecom Italia Mobile SpA.
The heads of the global customer units and market units will report directly to Mr. Hellstroem, Ericsson said.
The market reaction was lukewarm and Ericsson's shares were down 2% at 51.50 kronor ($5.06 or 5.55 euros) apiece in midday trading in Stockholm.
The company also said its market organization would now consist of three units instead of five.
Mats Dahlin, the head of the global-systems unit, will now head the market unit for Europe, the Middle East and Africa, Ericsson said.
Einar Lindquist, the head of the multiservices-network unit, will lead the business unit focused on W-CDMA and GSM mobile systems. Johan Bergendahl will lead the unit focusing on multiservice networks, and Aake Persson will lead the unit focused on CDMA mobile systems.
The two other business units will focus on transmission and transport and on global services, Ericsson said. All of the business units will report to Mr. Sandstroem, the company said.
Ericsson said it hoped the changes would make its sales and market organizations more responsive and provide new synergies for its business units.
It was the latest in a series of changes for Ericsson, which posted a loss of 13.8 billion kronor for the first half of the year. The company faces an industrywide slowdown with a global slide in demand for mobile-systems equipment and handsets.
Ericsson, which has been especially hard hit in its cell-phone division, also has announced plans to cut more than 10,000 jobs, outsourced its handset production and merged its mobile-phone operations with Sony Corp. Ericsson has nearly 100,000 employees and operations in 140 countries.
Mr. Sandstroem, currently the head of North American market operations, will take over on Sept. 1, while the new market organization will be effective on Oct. 1, the company said.
Ericsson named Angel Ruiz to replace Mr. Sandstroem as president of its North American division. Mr. Ruiz currently is executive vice president and general manager of that division. |
