Acer Group, one of the world’s largest suppliers of personal computers, has announced the resignation of J.T. Wang, chairman and chief executive officer. A comprehensive restructuring plan has been formulated by the Acer management team, and without delay, the board will commence with its corporate transformation. Corporate president Jim Wong will succeed Mr. Wang as the new CEO from January 1, 2014.
“We are very grateful for Mr. Wang’s contribution and hard work. The past two to three years have been extremely tough for Acer due to the rapidly changing industry and market conditions. We fully respect Wang’s decision to step down; however, in the interest of ensuring company stability and a smooth transition during this latest restructuring and transformation, we have asked J.T. to remain to complete his tenure as chairman which ends in June 2014,” a statement by Acer reads.
In the last three years Acer has significantly lost a large portion of revenue and share of the PC market as a result of its focus on netbooks in 2008 – 2010 timeframe and inability to quickly react on media tablet revolution. As a result, the company lost significant amounts of money in the recent years.
“Acer encountered many complicated and harsh challenges in the past few years. 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. Together with the management team, we have crafted a far-reaching plan for Acer’s transformation. 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,” said Mr. Wang.
Acer’s board has set up a transformation advisory committee with board member Stan Shih as chairman and Acer co-founder George Huang as executive secretary. The committee will propose changes in the company vision, strategy, and execution plans for the board’s approval. They will work with the management team to carry out the transformation to increase shareholder value. To support new development needs, the board has approved the issue of 136 million new common shares for a capital increase in cash (approximately 4.8% of total shares).
“After I retired from Acer I shifted my attention to promoting public interests. 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. After making structural adjustments, we will introduce more competitive products within the existing PC, tablet, and smartphone business and stabilize our market share. This will be the basis of our transformation and for developing new business opportunities,” stated Stan Shih.
Acer’s personnel and business restructuring plans include reducing manpower, product plan termination with related product tooling and legal fees, resulting in a one-time cost of $150 million which is expected to be reported in the Q4 2013 financial results. Acer will cut its worldwide employees by 7% resulting in OPEX savings of $100 million annually from 2014.