Dell announced Wednesday that Kevin Rollins has resigned as chief executive officer, and company founder Michael Dell has retaken the helm of the PC company.
This is not a short-term assignment," said Bob Pearson, a Dell spokesman. Dell, who founded the PC company in 1984, will retain his duties as chairman of the board of directors.
Rollins has also stepped down from the board of directors. In addition to announcing Rollins' departure, the company said that it now expects its fourth-quarter results to be below analyst expectations for both revenue and earnings per share.
The board of directors was involved in Rollins' decision to resign from the company, Pearson said. But he did not elaborate on whether Rollins was asked to resign by the board.
Rollins' departure comes after a terrible year for the company, during which it lost its lead in PC market share to Hewlett-Packard and an investigation by the SEC for possible accounting improprieties began. Several executives have left the company in recent months, including CFO Jim Schneider, who was slated to leave the company at the end of January.
"Kevin has been a great business partner and friend," Dell said in a press release. "He has made significant contributions to our business over the past 10 years. I wish him much success in the future."
Pearson would not comment on whether Rollins' departure was tied to the investigations into the company's accounting procedures. Dell is currently under investigation by the SEC over accounting issues that the company has said could result in significant restatements to its earnings before the 2006 fiscal year. The company has not specified the exact nature of the accounting issues, but has said they involve revenue recognition, and they do not appear to be associated with the stock-options backdating practice that has ensnared hundreds of companies over the past year.
Rollins took over the CEO reins in 2004 after several years spent as president and chief operating officer, during which he was characterized as a co-leader of the company with Dell. Rollins was brought into Dell in 1996 from management consulting firm Bain & Co. as an experienced business veteran tasked with helping Dell grow the company he founded in his dorm room.
A direct link to Rollins' biography had been scrapped from Dell's Web site but the information could still be found Wednesday afternoon immediately following the announcement. Dell's stock rose 4 percent in after-hours trading. Trading was briefly halted from 4:45 p.m. EST to 4:50 p.m. EST.
Dell had stood by Rollins throughout 2006, when some financial analysts were looking for someone to blame for the company's struggles, but the pressure appears to have become too great, analysts said.
"It's surprising. Rollins had the confidence of (Michael) Dell, but when you look at the numbers you can see why" Dell has retaken the helm, said Richard Shim, an analyst at IDC. "They have been suffering from a corporate market slump, and the usual bag of tricks--leveraging the supply chain and their economies of scale--haven't worked."
Dell was an unstoppable force in the PC industry from 1997 through 2004 and consistently gained market share from its competitors--even during slumps in the industry. At the time, Rollins was so confident about Dell's future that he set lofty goals for yearly revenue, promising to take in US$60 billion in annual revenue by this year and US$80 billion in revenue by the end of the decade.
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