New Middle East division formed in Ericsson shake-up

The Swedish telecommunications conglomerate has refocused and streamlined its global market management teams as it looks to recover from a slump.

Ericsson is reorganising to try to combat a downturn. Stig-Ake Jonsson / Reuters
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The ailing telecoms multinational Ericsson has formed a new division covering the Middle East and Africa as it reorganises its management set up.

The Swedish firm said it is simplifying its organisational structure by removing the existing two-tiered leadership structure, the executive leadership team and global leadership team, and forming a single executive team.

“In addition, the geographical set-up with 10 regions will become five market areas, and the business areas are re-defined and reduced to three. The new executive team roles and the new organisation will take effect April 1,” Ericsson said.

To head the Middle East and Africa market division, the firm has appointed Rafiah Ibrahim as the senior vice president, who is currently the head of region Middle East.

Elsewhere, Chris Houghton, currently the head of region North East Asia, becomes senior vice president for the same area, while Nunzio Mirtillo is to be the senior vice president for South East Asia, Oceania & India. He is currently the head of region Mediterranean.

“To execute quickly and successfully on the next phase of our strategy, a new leadership team will immediately start working together,’ said the Ericsson president and chief executive Börje Ekholm. “We will use the near future to solidify ways of working for the new structure, which will be more efficient and responsive to market and customer needs.”

The senior executives to leave are Per Borgklint, Anders Lindblad, Jean-Philippe Poirault and Charlotta Sund.

The announcement came as Ericsson said it will book as much as 15 billion Swedish kroner (Dh6.24bn) in extra costs in the first quarter as Mr Ekholm pares operations at the wireless network supplier after four straight quarters of falling revenue.

As he whittles down Ericsson’s structure to cope with a prolonged industry slowdown, he is also considering a sale of the media business that was a favourite of his predecessor, along with a unit that sells hardware for cloud computing.

“We have been spreading ourselves to thinly, which has led to our market and technology position being challenged,” Mr Ekholm said. “Today is the first step in a strategic repositioning of the company.”

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* with agencies