Telecommunications company Cable & Wireless Worldwide has announced that chief executive Jim Marsh has resigned with immediate effect.
Chairman John Pluthero will assume the chief executive role and has confirmed the company will invest more heavily in its cloud computing and hosted services.
Over the past year the business-focused telecoms operator has faced a sustained decline in its fixed-line revenue, which management attributes in part to constrained IT budgets among corporate customers amid ongoing economic uncertainty.
Last year the original Cable & Wireless group was split into two separate companies: Cable & Wireless Worldwide (CWW), led by Jim Marsh, and Cable & Wireless Communications (CWC). CWC consolidated the company’s international consumer and local telephony operations in markets such as Panama and Macau and several former British colonies, while CWW retained the UK-focused business, including the former Energis operations that are now part of the group.
Since the demerger, CWW has issued three profit warnings within a 15-month period and its share price has been roughly halved. The company’s recent performance has provoked shareholder concern, particularly following disclosure of the departing CEO’s severance package: Marsh will receive a payout equivalent to one year’s salary, reported at £650,000. At the same time, Pluthero will take on the CEO role and receive an immediate pay increase of £75,000.
In a statement, Pluthero acknowledged the difficulties of the past year and set out his priorities for stabilising and growing the business. “It has been a very difficult 12 months and it is now important that we take the necessary steps to ensure the future growth of our business,” he said.
Pluthero added that he intends to pursue a more radical strategy focused on scaling the company’s hosting, cloud and data services while improving competitiveness and operational efficiency across its more mature product lines. “It has been easy to lose sight of what this business could be; it is my intention to reassert and realise that future,” he said.
The leadership change signals a strategic shift toward cloud and managed services as the company seeks to adapt to changing customer demands and return to profitable growth. Management will be under pressure to deliver results and demonstrate that increased investment in higher-margin, scalable services can offset the decline in traditional fixed-line revenues.