IBM stock slips more than 4% as Jim Whitehurst steps down as president

International Business Machines Corporation’s (NYSE: IBM) Jim Whitehurst stepped down as president less than two years after joining the company. Shares of the computer hardware firm slid more than 4% on Friday.

Whitehurst had joined IBM through the Red Hat acquisition

Whitehurst served as the president and CEO of Red Hat – an open-source software company, for more than a decade. In 2019, IBM acquired Red Hat for $34 billion, bringing Whitehurst to IBM. In April 2020, he was promoted from the Red Hat position to the president of IBM Corp.

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According to IBM, Whitehurst was the architect that made it possible for Red Hat to grow its revenue more than eight times and market capitalisation over 10 times. In Q1, IBM as a group saw a 1% increase in its revenue while Red Hat climbed by 17%.

The news comes a few months after IBM reported its financial results for the first quarter that beat Wall Street estimates. The New York-based company noted a surprise increase in its Q1 revenue.

Whitehurst will remain a senior advisor to CEO Arvind Krishna   

According to IBM, Whitehurst will continue to serve as a senior advisor to CEO Arvind Krishna for a year.

Since the executive was brought on board through the Red Hat acquisition (IBM’s largest acquisition ever), investors questioned where his departure left Red Hat within IBM. Responding to such concerns, CEO Krishna clarified during a phone call with CNBC’s Jon Fortt that “Paul Cormier, who has been running Red Hat as the CEO, is not going anywhere, and Red Hat will continue to operate as usual.”

IBM is currently in the process of splitting into two distinct companies. Its services business will soon be spun off into a new $19 billion entity named Kyndryl. The separation is expected to complete before the start of 2022.