BT CEO Gavin Patterson will step down from the top job after a turbulent couple of years, with no-nonsense Chairman Jan du Plessis on the search for a replacement.
Patterson will stay in place until a suitable replacement has been found, which is expected to be in the second half of the year, though the statement put forward by BT highlights his position had now become unattainable. Despite putting forward an aggressive restructuring strategy and multi-play plan in recent weeks, reports emerged earlier this week du Plessis was under pressure from investors to make a change at the top. Patterson has been on thin ice for quite some time, and now it has cracked.
“Gavin has been with BT for just over 14 years and I want to thank him for his contribution to our business during that time, in particular during the almost five years that he has served as Chief Executive,” said du Plessis. “The Board is fully supportive of the strategy recently set out by Gavin and his team. The broader reaction to our recent results announcement has though demonstrated to Gavin and me that there is a need for a change of leadership to deliver this strategy.”
Despite a last throw of the dice from Patterson and his team over the last couple of weeks, the writing on the wall was starting to become much more legible. To say Patterson had overseen a blustery couple of years in the BT business would be one of the understatements of 2018, and there has been a feeling it was only a matter of time before a change at the top was announced. We expected Patterson might have been given another quarter to ensure du Plessis had all the ammunition needed to make the decision, but the decisiveness of the South African with a tough reputation is clearly evident here.
The recent sacking of 13,000 employees was possibly the culmination of several disasters over the last two years which ranged from accountancy scandals in Italy, to billions being spent on sports rights with little reward, a massive pensions deficit and finally a dysfunction relationship with Ofcom, which resulted in a costly and slightly humiliating legal separation of the Openreach business. The business has seemingly constantly under pressure, which is expected for a former monopoly, which owns a wholesale fixed business and is the national incumbent, but many would have expected the management team to create a more hospitable relationship with the regulator.
Patterson might have been a charismatic leader and an effective spokesperson for BT, but the inadequacies of the business under his management cannot be ignored. The BT share price is at its lowest point for six years, the integration of EE has shown little reward to date, while revenue has continued to decline. There was little alternative but to seek new guidance.
Some might suggest there are few others who could have prevented BT heading down this stormy road, perhaps indicated Patterson is a bit of a scapegoat for a business which is fundamentally inadequate for the digital economy, but life at the top is tough. If BT was on the opposite side of the performance spectrum, Patterson would be collecting the rewards; unfortunately he now has to take responsibility for the failures.