The BT CEO said on Tuesday that he was stepping down at the end of May, to be replaced by retail boss Ian Livingston – causing BT’s share price to tick up a few pence. Although Verwaayen is widely credited with rescuing BT from the perilous position it was in when he took over in 2002, his halo has slipped slightly in the last six months; BT’s share price has plunged about 30% since he revealed disappointing half-year results back in November, thanks partly to falling sales in its wholesale division. Then in February, BT’s quarterly results showed a 30% fall in profits.
Livingston, on the other hand, has been the coming force for some time now. After joining BT as group FD in 2002, he took charge of the retail arm in 2005 and has since done great things with it, turning BT into the UK’s biggest broadband supplier with over 4m new subscribers. Since Andy Green (BT’s head of strategy and his most likely rival for the top job) left to become CEO of Logica last year, he’s been very much the heir apparent – so the succession should be pretty smooth.
The events of recent months mean Verwaayen will inevitably depart under a bit of a cloud (some are even speculating that he wouldn’t be retiring unless there was more bad news on the horizon for BT), but we shouldn’t forget what a basket case BT was when he joined from Lucent six years ago. Knee-deep in debt after some spectacularly bad overseas deals, its core business of fixed-line telephony was in long-term decline and its market share was dwindling due to increasing competition from fleet-footed rivals. The company was a rudderless mess, losing billions every year – and not everyone was convinced the barely-known Dutchman could turn it around.
However, with help from Livingston and co he managed it, steering the company back to profitability – although he’s had to cut about 5,000 jobs per year ever since in his attempt to knock the company back into shape. Progress may have stalled in recent months, but like any good CEO, the company he hands over to his successor is in much better shape than when he found it – even if the share price doesn’t necessarily reflect that.
Now we wait and see whether Livingston can live up to its lofty reputation and get BT back on line...