Brisk Departures for Telecom CEOs

Microsoft developers may have been relieved after CEO Steve Ballmer announced his retirement earlier this year. And Acer America’s staff may have felt somewhat satisfied after CEO J.T. Wang announced his resignation in November, given their lack of faith in him. And BlackBerry’s CEO Thorsten Heins, well, he was bound to go at some point.

But these tech CEOs weren’t the only ones who headed out the door in 2013. In fact, a total of 180 heads of U.S. tech companies departed this year, according to outplacement firm Challenger, Gray & Christmas. The telecommunications sector saw the greatest number of exits – 27.

Chart: U.S. Telecom CEOs Depart

“When you have a sudden increase in CEO departures, it’s usually a sign of a turbulent environment,” observes John Challenger, CEO of Challenger, Gray & Christmas. “Cost pressures may push some companies to the edge.” Telecom companies dependent on government contracts may have felt a special squeeze during sequestration earlier this year, he notes.

Shake Ups

Three issues are driving telecom CEOs to depart, says Charles Moore, managing partner at Naperville, Ill.-based NextGen Global Executive Search. One major challenge is a generational shift.

A number of telecom CEOs are in their 50s and 60s, while the heaviest users of wireless and voice networks tend to be young adults and teens. And it’s this heavy network use that means money for both carriers and the vendors that support them.

“While some of these CEOs who left are good CEOs, they may have recognized they are not the right CEO for the future,” Moore says. “CEOs are hired for their vision and strategy.” Since consumers locked into two-year service contracts tend to stay with their carriers, the telecoms are most concerned with finding ways to milk existing customers for more money.

Also contributing to this shift is the movement away from CEOs who are steeped in hardware to ones more familiar with the software side of maximizing infrastructure. “All the carriers are now moving to LTE and it’s not as hardware specific,” Moore says.

In addition, a surge in regulations as well as a lackluster economy doesn’t bode well for adding a ton of new services and products. “I had one CEO who asked me to find him a new job because he was bored and didn’t find the work a challenge any more,” Moore says. “He said there was no money to create new products and services in this economy.”

Comments

  1. BY jelabarre says:

    Issues forcing CEOs to resign? Perhaps the abject failure of the last 20 or more years worth of administrations? Perhaps excessive regulation and the need to be washington insiders, with near conspiratorial collusion with government regulators just to run a business (while running your competitors out). Or perhaps the plague of MBAs infesting our companies, turning those companies into victims to be sucked dry until the administrators can jump to the next victim.

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