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Fired Ericsson boss to get millions in payouts

Swedish telecoms giant Ericsson has fired its long-standing CEO Hans Vestberg, but said he will receive a severance package amounting to millions of kronor.

Fired Ericsson boss to get millions in payouts
Hans Vestberg of Ericsson. Photo: Christine Olsson/TT
Swedish telecoms giant Ericsson has fired its long-standing CEO Hans Vestberg, the company announced on Monday morning.
 
Vestberg has been under pressure in recent weeks in the light of a falling share price and lower-than-expected profits. Last week, the company – Sweden's second largest by turnover – announced it was doubling the scope of a major cost-cutting program.
 
In a statement on Monday, chairman Leif Johansson said that “given the current market environment and the increased tempo of the execution of the company’s strategy, the board has decided that the time is right for a new leader to drive the next phase of Ericsson’s development.”
 
Johansson said Vestberg had “built strong relationships and partnerships with important customers around the world, and his leadership and energy have been inspiring for both employees and leaders within Ericsson.”
 
Vestberg, 51, has worked at Ericsson since graduating in 1991. He has been CEO since 2010.
 
Ericsson’s share price has plunged 23 percent so far this year, while the market as a whole has fallen just three percent. Operating profits for the second quarter were well below market expectations, at 2.8 billion kronor ($327 million).
 
The company’s deputy CEO Jan Frykhammar has been appointed as interim CEO.
 
Vestberg is likely to receive a severance package of 28 million kronor, seven million of which will be paid out during his six-month notice period.
 
“After the notice period he will get 21 million in severance pay, which corresponds to 18 months of salary. If he gets a new job within these 18 months, the payout could be cut to up to 50 percent,” Ericsson press officer Simon Sundberg told the TT newswire.

ABB

Swedish engineering giant ABB to quit Russia over Ukraine

Swedish-Swiss engineering giant ABB said on Thursday it will quit Russia as a result of the war in Ukraine and the related international sanctions against Moscow.

Swedish engineering giant ABB to quit Russia over Ukraine

Russia accounts for only one or two percent of ABB’s overall annual turnover and the decision to pull out will have an estimated financial impact in the second quarter of around $57 million, the group calculated.

“ABB has decided to exit the Russian market due to the ongoing war in Ukraine and impact of related international sanctions,” the group said in a statement.

Russia accounts for only one or two percent of ABB’s overall annual sales and the decision to pull out will have an estimated financial impact in the second quarter of around $57 million, the group calculated.

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A large number of major western companies have pulled out of Russia since Moscow invaded its pro-Western neighbour on February 24.

“When the war broke out, ABB stopped taking new orders in Russia,” the group said.

At the same time, it said it continued to fulfill “a small number of existing contractual obligations with local customers, in compliance with applicable sanctions.”

Most of ABB’s dedicated Russian workforce has been on leave since March “and the company will do its best to support them as it realigns its operations in a controlled manner,” it said.

ABB has about 750 people in Russia and two production sites in the country located in the Moscow region and Lipetsk, as well as several service centres.

Separately, the group said that its net profit fell by 50 percent to $379 million in the second quarter, largely as a result of one-off charges, but also the cost of withdrawing from Russia.

Sales, on the other hand, grew by six percent to $7.2 billion in the period from April to June, ABB said.

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