Less than three months after announcing it would cut US$25 million in personnel and other expenses from its technology business after demand for data center hardware and software nosedived, Avnet announced a change in leadership yesterday.
CEO Rick Hamada has stepped down after five years on the job and will be replaced on an interim basis by Bill Amelio, whose past roles include CEO and a director of international oil-field services company CHC Group Ltd., and president and CEO of Lenovo. His resume has a strong a technology bent, having also served in senior roles at Dell and National Semiconductor. Amelio began his career with the Microelectronics Technology Division of IBM in 1979 and later became the GM, worldwide operations of Big Blue’s PC division.
Hamada’s departure as CEO and from the technology distributor’s board of directors is effective immediately. He had been with the company since 1983, having taken the top job in 2011. Avnet will now begin the process to select a more permanent CEO from amongst both internal and external candidates, including Amelio, who has sat on Avnet's board of directors since May 2014. That decision is expected to made with the next six months.
In conjunction with the significant personnel change, Avnet also announced sales numbers that were less than initially forecast: Sales in the Americas region of company’s semiconductor-focused electronics marketing business are expected to come in $100 million below the prior outlook due to an enterprise resource planning (ERP) implementation in the region, and costs maintain customer deliveries in that same region were also higher.
Revenue for Avnet's technology practice during the third quarter dropped 12.9% to $2.13 billion; in fact, all three business regions experienced double-digital sales drops, and it updated guidance for the quarter that ended July 2, with company-wide earnings for the fourth quarter expected to come in at between 80 and 86 cents per share, which is well below previous guidance of 95 cents to $1.05.