Marconi CEO-Designate to Step Down; Resignation Comes Days After Warning
A WALL STREET JOURNAL ONLINE News Roundup
The man who was poised to become the new chief executive of British telecommunications-equipment group Marconi PLC later this month stepped down on Friday, a Marconi spokesman said.
The resignation of John Mayo, deputy CEO, comes just two days after London-based Marconi delivered some jarring news, announcing that it will cut an additional 4,000 jobs and that its operating profit for the fiscal year ending March 2002 will be about half of what it was the previous fiscal year. Marconi's stock plunged more than 52% Thursday and closed down 9% to a new 52-week low of $3.05 on Friday, in 4 p.m. EDT trading on the New York Stock Exchange.
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A company spokesman said George Simpson will remain as chief executive and Roger Hurn as chairman. As part of a management succession plan first announced about a year ago, Mr. Mayo was to take the reins on July 18, when Mr. Hurn was scheduled to retire.
"Marconi is a great company going through difficult times not of its own making," Mr. Mayo said in a statement released Friday. "The entire work force faces short-term challenges and it is inevitable that sacrifices will have to be made for Marconi to enjoy the prosperity and growth available in the medium and long term."
Marconi officials said Mr. Simpson's role as chief executive and Mr. Hurn's as chairman shouldn't be seen as temporary.
In April, Marconi announced a restructuring that it expected to generate annual cost savings of up to 200 million pounds ($280 million) by the end of 2003. After the new round of cuts and the outsourcing of part of its business, Marconi expects its staff to be reduced by a total of 10,000.
Marconi, which changed its name in 1999 from The General Electric Co. PLC, has a substantial presence in the U.S. due to its acquisition in 1999 of Cleveland-based Reltec Corp. and Fore Systems Inc., headquartered in Pittsburgh.
Mr. Simpson said he believed Marconi had a strong future.
"The speed and severity of the downturn in the markets clearly requires firm action and the solutions will not emerge overnight,'' he said.
"However, the longer-term prospects of the industry remain good, we are soundly financed and we believe we are much better positioned than a number of our competitors.'' |
