Proactive Investors - Blackberry (TSX:TSX:BB)'s longtime CEO John Chen is retiring from his role at a pivotal moment for the firm as it intends to split its Internet of Things (IoT) and cybersecurity divisions into separate companies.
The Waterloo, Ontario-based technology company announced on Monday that Chen would be retiring from his position at the end of the week with board member Richard Lynch to temporarily take over the role as Blackberry (TSX:BB) searches for a permanent replacement.
As Chen’s contract was nearing expiry, BlackBerry (TSX:BB) concluded a strategic review of its portfolio and announced its intention to spin off its IoT business into a separate public company from its cybersecurity software segment.
The company is targeting a subsidiary initial public offering (IPO) for the IoT business in the first half of the next fiscal year.
According to Bloomberg Intelligence senior industry analyst John Butler, the leadership shakeup will allow “a new chief to bring fresh perspective and ideas” to BlackBerry after its IoT spinoff.
In a letter to shareholders on Monday, Chen wrote that “the time seems right for me to leave.”
He wrote that he came out of retirement to join BlackBerry in November 2013, initially as its interim CEO, with three goals: to repair BlackBerry’s financial health when it was “just days away from potential bankruptcy”, establish a new strategy and align it with the company’s capabilities to deliver that strategy, and set the company up for long-term growth.
He noted that he was saddened to share the news of his retirement “with little notice,” but he did so as he believed it was important for the company’s business review, Project Imperium, to run its course.
“Know that I am leaving feeling deeply conflicted but also with being sure that it is the right time for it,” Chen wrote in the letter.
BlackBerry shares, which gained about 6.5% at Monday's close on reports of Chen’s departure, fell 1.8% to US$3.56 on Tuesday afternoon.