Nokia Corp. or Nokia, a Finnish telecommunications and information technology company, announced on Monday that a new CEO would replace the incumbent CEO of the company, Rajeev Suri who is stepping down from his position in September 2020. Suri will be replaced by Pekka Lundmark, who used to work for the Finnish company and is the current CEO of a Finnish state-owned energy group, Fortum.
Lundmark Replacing Suri
Suri, who was previously working as the head of Nokia Siemens Networks, a subsidiary of Nokia, has been leading the Finnish’s leading consumer electronics company for six years before he retires from his role in September.
Recently, the Finnish company has been struggling to regain investors’ confidence and issued a surprise profit warning in October 2019, as a result, the company lost a third of its value and had to delay its operation of 5G development.
For now, Nokia’s surprise profit warning in October had cost the company a lot which led to halting dividend payouts for so long. The Finnish company is now facing intense competition from its rivals, Sweden’s Ericsson and China’s Huawei in the race to deliver 5G telecoms networks to operators around the world.
The present CEO will be replaced by Lundmark, who has been leading the energy company, Fortum since 2015. Lundmark also held multiple executive positions at Nokia between 1990 and 2000, including as the vice president of strategy and business development at Nokia Networks.
He led the energy company to pursue an ambitious attempt to a buyout of its Germany-based rival, Uniper SE, which resulted in a deadlock between the companies. Lundmark had led a Finnish crane maker, Konecranes for 10 years until 2015 before joining at Fortum.
Nokia’s Chairman Responses
Referring to the selection of the new executive officer of the company, Nokia Chairman Risto Siilasmaa said in a statement, “He has a record of leadership and shareholder value creation at large business-to-business companies; deep experience in telecommunications networks, industrial digitization, and key markets such as the United States and China.”
The chairman also cited the experience of the new CEO “on strategic clarity, operational excellence, and strong financial performance.”
An analyst, Mikael Rautanen of Inderes stated, “We view the change of CEO positively due to the fact that in its current situation Nokia needs a greater redirection which embarks from changing the management.” He further added, “At the same time, the news strengthens our earlier assessment that the company has more than just temporary problems.”
Nokia’s shares gained last week after Bloomberg News reported about a new policy of the Finnish telecom company that considered its asset sales and mergers. Meanwhile, a source close to the company told Reuters that Bloomberg’s report was a piece of false information but Nokia declined to comment on it when Reuters approached it.
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