Share prices for International Business Machine (IBM) Corporation tumbled by 4.8% as trading ended on Friday, June 25th. This development came following the announcement that its president, Jim Whitehurst, is calling it quits. As a result, IBM’s share values dipped to $139.83; this is the lowest that prices have fallen to over the past five months.
Whitehurst may be stepping down from the role, but he isn’t leaving IBM. Instead, he will continue to work in the capacity of a senior management adviser. The company has yet to announce if anyone has been selected to take his place.
Before joining IBM, the 53-year-old Whitehurst was CEO of open-source software developer RedHat Inc. IBM bought the company in a $33 billion deal back in 2018. He had also served as chief operating officer for Delta Airlines and was considered in the running as the next IBM CEO before its current CEO, Arvind Krishna, was formally appointed to the post.
Industry watchers are shaking their heads at this turn of events. They warn that investors and shareholders will see Whitehurst’s departure as a setback to IBM’s drive towards more innovative computing solutions.
Wedbush Securities analyst Moshe Katri was prompted to say, “[Whitehurst] was expected to have an important role in the transformation initiative of IBM.”
Time to reshuffle
Watchers see this event as the first of several corporate shake-ups Krishna has called for in a bid to revive the century-old computing giant from several decades of developmental inactivity.
The 2018 purchase of RedHat was one such initiative, and Krishna, a long-time employee of the company, has set his sights on bringing IBM up to speed when it comes to more recent developments such as cloud computing and artificial intelligence.
When Whitehurst joined IBM, he brought in a wealth of expertise to the company, mainly where cloud computing was involved. In particular, he was instrumental in helping IBM pivot to a hybrid cloud strategy wherein clients could store information in both public clouds and on more secure private servers.
It is interesting to note that RedHat continues to perform well while IBM continues its uphill climb to grow its revenues. Sales for the software developer were up by 17% as of the end of Q1-2021.
Over the past couple of years, Krishna has made sweeping changes throughout IBM, impacting everything from its hierarchical structure to research and development. In late 2020, he announced a sizable number of job cuts in the company’s European sector in a bid to diversify the company’s core business, spinning off from corporate computing to focus on the increasing demand for cloud services.