International Business Machines Corp. (IBM) President Jim Whitehurst resigned after serving for three years at the century-old technology company, affecting share prices that fell the most in five months.
The move looks like the first major corporate reshuffle under CEO Arvind Krishna.
Since taking over last year, he has quickly reshaped IBM and returned it to growth.
In 2018, IBM acquired Mr. Whitehurst, 53, former CEO of Red Hat Inc., in a $33 billion deal arranged by Krishna.
To revive decades of stagnation, the CEO, Krishna, has focused on fast-growing technologies like artificial intelligence and cloud-computing services.
On Friday, several management moves were announced by IBM announced, and Whitehurst’s departure is one of them.
According to IBM, Whitehurst “decided to step down,” as he will continue working as a senior adviser.
Changes Affecting IBM Shares
So far, IBM didn’t announce a replacement for the position. But this move affected IBM shares, as they tumbled by 4.8% to $139.83 on the news.
With the appointment of Whitehurst as president, IBM separated the roles of CEO and president for the first time in decades.
At that time, his experience in cloud and cognitive software was viewed as a complement to Krishna, a longtime IBM executive.
Beyond that, Whitehurst played a key role in Krishna’s pivot to a hybrid-cloud strategy that allows customers to store data on both private servers and multiple public clouds.
Surprise For Analysts
When IBM struggle to achieve revenue growth, Red Hat’s performance has remained strong, posting a 17% gain in sales in the first quarter.
That is why Whitehurst’s departure came as a surprise for many analysts and saw it as a negative.
An analyst at Wedbush Securities, Moshe Katri, said, “This is rather disappointing given that Jim was expected to be an integral part of IBM’s transformation effort,.”
Whitehurst was principally responsible for Delta Airlines’ operations before joining Red Hat, and had been considered a candidate to lead IBM until Krishna was appointed.