IBM shares fell as much as 5% on Friday after the enterprise software and hardware maker said that its president, Jim Whitehurst, has chosen to step down. The stock closed down almost 5% in the day’s trading session.
Whitehurst arrived in 2019 through the $34 billion acquisition of open-source software company Red Hat, IBM’s largest acquisition to date, which closed in mid-2019. He had been Red Hat’s president and CEO from 2008 until April 2020, when he became IBM’s president.
The move reflects a new challenge for IBM, which has pursued growth in part through focusing on deploying Red Hat’s products on multiple clouds, including leading providers such as Amazon and Microsoft. Before the deal, IBM promoted its own public-cloud infrastructure to customers, in addition to selling products that companies could deploy in their own data centers.
Arvind Krishna, who replaced Ginni Rometty IBM’s CEO since last year, was “a principal architect” of the Red Hat deal, IBM said last year in the announcement about Whitehurst’s promotion. The company praised Whitehurst for his execution. “During his tenure at Red Hat, revenue grew over eight times and market capitalization by more than 10 times,” IBM said. Whitehurst will remain as an advisor to Krishna and other IBM executives.
In the first quarter Red Hat’s revenue grew 17%, while IBM as a whole grew 1%.
Correction: Whitehurst arrived at IBM in 2019.
WATCH: IBM CEO Arvind Krishna on the company’s ‘hybrid cloud’ strategy
