Acer's President Follows CEO and Resigns
Embattled PC maker Acer is undergoing another CEO change, just weeks after naming President Jim Wong to replace T.J. Wang in the top slot.
Acer officials earlier this month announced that Wang was resigning as chairman and CEO as part of a restructuring plan that includes ditching some products and cutting its workforce by 7 percent. Wang said he was resigning due to the poor financial performance of the company, which finds itself in tough competition with the likes of Apple and Samsung.
The board of directors had tapped Wong to be the CEO who would have to oversee the restructuring plan.
However, the company announced Nov. 21 that Wong, too, is resigning in the wake of another difficult financial quarter, and that co-founder Stan Shih will step in as chairman and interim president until a permanent replacement is found. In addition, the company is doing away with the position of CEO, deciding instead to spread the CEO duties among the president and board chairman. The expectation is that such a change will make decision-making at Acer more efficient.
“Due to the situation that now faces Acer and my personal social responsibilities, I must stand up and take the [rein] without salary,” Shih said in a statement. “I will honor and complete all the public affairs and event engagements that I have committed to, but I will also fully support Acer’s ICT device business and carry out the company transformation."
He added that another co-founder, George Huang, also will join the management team. Wang and Wong will remain with the company as advisers, according to Acer officials.
It's been a difficult few years for Acer officials, who at one time expected to ride the success of its netbook sales to even greater prosperity in the larger PC market, where they would challenge Hewlett-Packard and Dell. However, like many PC makers, Acer has been hit hard by the slowdown in worldwide PC sales and the rise of Apple's iPad and other tablets running Google's Android mobile operating system.
Most recently, Acer in the third quarter saw revenues fall 11.8 percent—to $2.11 billion—from the same period in 2012, while losses grew to $86.61 million. According to company officials, much of the loss could be attributed to Acer's efforts in ramping up for the release of Microsoft's Windows 8.1 operating system.
The third quarter exemplified what has happened all year, officials said. In the first three quarters of 2013, Acer saw revenues drop 16.6 percent, to $9.22 billion, while losses grew to $106.3 million. In the fourth quarter, officials expect shipments of its notebooks, tablets and Chromebooks to fall another 10 percent compared with the third quarter.
Acer's restructuring will include slashing the company's workforce by 7 percent in hopes of saving $100 million in expenses. It will result in a one-time charge of $150 million, according to the company. It's unclear how many jobs will be cut; on Acer's corporate Website, it says there are 7,500 employees, but that is as of March 2011.
Acer directors earlier this month announced the creation of a Transformation Advisory Committee that includes Shih as chairman and Huang as executive secretary. Committee members will propose changes to the board of directors for approval and will work with the company's management to carry out the changes.