Qwest Communications CFO John Richardson will leave his post after just a year, becoming the latest executive to depart under Ed Mueller, the firm’s new chief executive who joined last August.
Richardson, 63, will stay on until a replacement is found, the company said Friday. “We believe that, in part due to John’s efforts, the company is on sound footing,” Mueller stated.
During the last year Qwest has seen the departure of its head of operations, senior vice president of federal relations, and an executive vice president in charge of marketing and communications. Richardson was not available for comment. “His departure was a mutual decision between the company and John that it was time to look for a new CFO,” Diane Reberger, a company spokesperson, told CFO.com.
The Denver-based telephone service provider that operates in 14 Western states has been under severe pressure of late as customers have been dropping their landlines in favor of wireless or cable plans. The company had 12.78 million landlines in 2007, a 7.3 percent decline from the previous year.
Richardson joined Qwest in 2003 as controller after spending 35 years at Goodyear Tire & Rubber Co. His primary mission when he took over as CFO was to slash costs. The company had $26 billion in debt and was generating a negative cash flow when he joined.
“It had a significant liquidity crisis,” Richardson told CFO.com in an interview last month.
Richardson noted that Qwest was successful at maintaining quality customer service despite significant layoffs. The company reduced its workforce from 51,000 employees to 37,000 employees by the end of 2007. Last month Qwest announced further job cuts and buyouts of nearly 2 percent of its remaining workforce.
Analysts said that Richardson’s departure was likely due to Mueller’s desire to bring put his own people. Last August Richard C. Notebaert retired from Qwest as chairman and chief executive. “John Richardson’s departure is more of Mueller putting his own team in place,” Donna Jaegers, an analyst at Janco Partners, told CFO.com.
Chuck Eldridge, a managing director of the executive recruiting firm Korn/Ferry, noted that such a move confirms how CEOs want to have their own strategic business partners. “New CEOs more often than not bring in their own CFO,” Eldridge says. “Unfortunately, it seems like few wish to fully assess the sitting CFO.”
The recent turnover among Qwest executives comes as the company appears finally to have put to rest financial scandals from earlier this decade. In April, former Qwest CEO Joseph Nacchio was found guilty in a federal-court trial of 19 counts of illegal insider trading for selling $52 million worth of Qwest shares in April and May 2001 after receiving private warnings that the company would miss revenue targets. That verdict has since been appealed and overturned. Nacchio is awaiting a new trial.
Last June former Qwest CFO Robin Szeliga agreed to pay $577,000 as part of a Securities and Exchange Commission settlement stemming from her role in the alleged accounting fraud at the telecommunications company.
Since Mueller took over the CEO job in August, Qwest’s stock price has dropped from $8.55 per share to $4.71 as of Monday afternoon.