re: Per-Arne Sandstrom (COO) & Centralization
>> Ericsson Centralizes and Appoints COO
Phil Jones
Computerwire
August 20, 2001
LM Ericsson Telefon AB unveiled finishing touches to its corporate restructuring exercise Friday, announcing a new global marketing and product structure, and the creation of a new chief operating officer role to be filled by company veteran Per-Arne Sandstrom.
Stockholm, Sweden-based Ericsson's rebuild has been among the most dramatic in the telecommunications equipment manufacturing (TEM) sector, as the company has shed 14,000 staff, and exited mobile handset manufacture, a former core business. On Friday the company said its shrunken structure will be coalesced into more streamlined and centralized structures, under a COO charged with protecting cost savings that have already been made, while pursuing potential new ones.
Ericsson's global marketing organization, which is currently spread across 100 market units in 140 countries, is being radically trimmed "to well below 50" a spokesperson said, and capped with the creation of five new global customer units. The creation of the customer units "reflects what we see happening to our largest customers three years down the road," the spokesperson said, "we see the top 10 customers getting bigger and between them taking 50 percent of the market in terms both of traffic and subscribers."
The appointment of Sandstrom to the newly created COO's office is a safety measured designed to ensure that the SEK 35bn (USA 3.4bn) of costs that Ericsson estimates to have cut from its balance sheet in the past 12 months is not allowed to reappear.
Sandstrom, who currently heads Ericsson's North American operations, is described as an "old hand" with broad experience of the all the company's activities. His first job is to set in place a new product and service structure, which he is likely to govern on a tight rein. The new units include a mobile systems, WCDMA and GSM unit that will contain most of Ericsson's mobile infrastructure products and technology, and will be the company's biggest revenue business. A new Multi-service Networks and Data Backbone unit will contain Ericsson's legacy fixed-line business and its router products. A separate CDMA unit will be retained to run the San Diego-based operations acquired from Qualcomm, and focus mainly on the US and China. The remaining two units will contain Transmission and Transport products, the company's 20,000-employee-strong Global Services operation.
The whole new structure is scheduled to swing into force on October 1, which coincidentally is also the day when Ericsson and Sony will formally unveil their mobile terminal joint venture in London. Had Ericsson made a better job of its mobile handset business in the first place, this year's restructuring might not have had to be so profound. <<
- Eric - |
