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Part of Ericsson’s restructuring may see it pull it out of media services, as a new streamlining strategy from CEO Börje Ekholm sees it refocus on three segments: networks, digital services and the Internet of Things (IoT).
According to reports the company’s Managed Services arm will be shaken up to focus on automation, but its media and IT Cloud Infrastructure hardware businesses could be sold. The media arm will be split into two, Broadcast & Media Services and Media Solutions, while it examines what to do with the poorly-performing business.
The company described its new overall strategy as enabling service providers to “expand their business across industries and into new profit pools”. Ericsson announced a writedown of SEK 3-4 billion (€3-400m) in Q1, plus a separate SEK 7-9 billion provision related to “negative developments related to certain large customer projects”. Ericsson put the total cost of restructuring the business at SEK 6-8 billion this year.
It will continue to cut costs, but Ekholm said he would not be providing guidance on how much nor where the cuts would fall. The restructure was accompanied by changes to the management team.
Per Borgklint, Chief Innovation Officer and Head of Media, Anders Lindblad, Head of IT & Cloud Products, and Jean-Philippe Poirault, Head of IT & Cloud Services, are to depart as their units are apparently destined for sale.