Not 24 hours after BlackBerry Limited announced the collapse of its $4.7 billion deal with Fairfax and the resignation of CEO Thorsten Heins, another CEO will be stepping down at the end of the year: Acer's J.T. Wang. The company said on Tuesday that Corporate President Jim Wang will succeed J.T. Wang as the new CEO from January 1, 2014, and that Wang will remain at Acer to complete his tenure as Chairman, which ends in June 2014.
"Acer encountered many complicated and harsh challenges in the past few years," J.T. Wang stated. "With the consecutive poor financial results, it is time for me to hand over the responsibility to a new leadership team to path the way for a new era."
The news arrives as the fourth largest PC maker posted a worse-than-expected net loss for the third quarter. Acer recorded a net loss of 13.12 billion New Taiwan dollars, or $442.2 million USD, in the three months that ended September 30, 2013. This was largely due to unsold devices and a NT$9.94 billion charge on the company's acquisitions including Gateway and Packard Bell, both of which dropped in value thanks to the declining PC market.
"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," reads the company press release. "In addition, in Q3, there were one time compensation payments related to the long standing eMachines consumers litigation."
Acer's Board revealed on Tuesday that it has established a Transformation Advisory Committee with board member Stan Shih as Chairman and Acer co-founder George Huang as executive secretary. This committee will reportedly propose changes in the company vision, strategy, and execution plans for the Board's approval. The Board has also approved the issue of 136 million new common shares for a capital increase in cash to support new development needs.
The company's restructuring plan includes reducing its worldwide employees by 7 percent, resulting in an operation expense savings of $100 million USD annually from 2014. The company also plans to terminate several product plans and related tools, thus generating one-time legal fees for $150 million that will be reported next quarter. Once the transformation is made, Acer will introduce more competitive products within the existing PC, tablet, and smartphone business.
"After I retired from Acer I shifted my attention to promoting public interests," said Shih. "But when J.T. tendered his resignation, the Board turned to me for help. In consideration of personal social responsibility and for Acer's onward sustainability, I agreed to take on the duty to help the management team with a smooth handover during this transition period."
"Together with the management team, we have crafted a far-reaching plan for Acer's transformation," J.T. Wang added. "I wish to thank the board members for their support and to Jim for assuming the CEO duties. I feel optimistic toward Acer's future. The management team promises to carry out the internal restructuring and will work closely with the Board on the corporate transformation."