Acer Founder Shih Takes Helm Amid Losses, Executive TurmoilAcer Founder Shih Takes Helm Amid Losses, Executive Turmoil
Acer founder Stan Shih will take the helm of the company he founded nearly 40 years ago, returning after a nine-year retirement to steady the PC maker amid record Q3 losses and turmoil in the executive suite. Shih will take Acer’s reins as chairman and interim corporate president and will hold the former title until his term on the company’s board of directors expires.
November 22, 2013
Acer founder Stan Shih will take the helm of the company he founded nearly 40 years ago, returning after a nine-year retirement to steady the PC maker amid record Q3 losses and turmoil in the executive suite.
Shih will take Acer’s reins as chairman and interim corporate president and will hold the former title until his term on the company’s board of directors expires.
Acer’s chief executive J.T. Wang recently resigned in the wake of the company’s disappointing $446 million Q3 loss, replaced by Jim Wong, a 27-year company veteran and corporate president, who immediately was saddled with presiding over a 7 percent layoff of the vendor’s 8,000 employees, estimated to save some $100 million next year.
Now Wong has resigned his president’s job and declined to take the chief executive slot previously held by Wang, according to an Acer statement. Both Wong and Wang will stay on as advisers while a new management team is put in place, the company said.
Acer’s board had agreed to do away with the chief executive position altogether and place those duties under the direction of the chairman or president, a move the company said will make the company’s decision-making more efficient.
Shih said in light of Acer’s recent financial performances he was compelled to take control to stabilize the company. He said he will work without pay, pointing to his “personal social responsibilities” as compelling him not to take a salary.
“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 said.
George Huang, an Acer co-founder with Shih, also will return to the management team, Acer said. The company said it will fill the corporate president’s post as soon as it can.
For Q3, Acer’s sales declined nearly 12 percent year-over-year to about $3.1 billion. In the same period last year, the vendor posted a net profit of about $2.31 million and, in the immediately prior quarter, it lost $11.7 million. The company said it will take a one-time accounting charge of $150 million related to the workforce reduction and a “product plan termination,” about which it offered no details.
“Q3’s operating loss was mainly due to the gross margin impact of gearing up for the Windows 8.1 sell-in and the related management of inventory,” the company said in a statement.
As for Q4, Acer didn’t project much better news as it expects notebook, PC and Chromebook shipments to slide 10 percent from Q3 as it reconfigures its brand strategy.
According to researcher IDC, for Q3 2013 Acer ranks fourth in worldwide PC shipments with a 6.7 percent share of the market on a 34.5 percent year-over-year drop in units shipped. Last year, even though Acer still ranked behind market leader Lenovo, Hewlett-Packard (HPQ) and Dell, its stake of the global PC market stood at 9.5 percent.
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