July could be a make-or-break month for Ericsson's CEO as consecutive quarters of disappointing results and an ongoing corruption scandal for the Swedish vendor are putting pressure on Hans Vestberg's position at the top, according to sources.
The Stockholm-based vendor is due to report its second-quarter results on July 19. In recent quarters, the company has seen declining revenues, even as -- this year -- the CEO tried to restructure and revamp the 150-year-old company. (See Ericsson Restructures as Sales, Gross Margins Falter in Q1, Ericsson CEO Seeks New Growth Formula and Ericsson Predicts Weak Q4.)
Light Reading asked Ericsson about the corruption allegations on Thursday. The company sent us this statement on the US inquiry and details about a Greek investigation. Basically, the company isn't saying much beyond this yet.
An Ericsson spokeswoman in New York City also couldn't comment further.
"There's been rumblings for a while now... historically, Ericsson cycles through a CEO every four or five years. They're coming up on four years," says one industry source Light Reading spoke to this week about Vestburg's potential departure.
Ericsson denies that the CEO is under pressure.
Nonetheless, according to two sources within Ericsson, the company's recent strategic alliance with Cisco Systems Inc. (Nasdaq: CSCO) has caused a lot of uncertainty among middle-ranking executives wondering about their jobs. Light Reading has been told that at least two general managers have left recently.
If the second-quarter financials come in below expectations, as they might, that could very well herald a change at the top table at Ericsson.
— Dan Jones, Mobile Editor, Light Reading