Avnet Changes CEOs: Hamada Out, Ex-Lenovo CEO To Fill In On Interim Basis

Avnet CEO Rick Hamada has stepped down after more than five years in the top slot, and is being replaced on an an interim basis by former Lenovo CEO Bill Amelio, the company announced Monday.

"The board believed that change in leadership was needed to accelerate the progress on Avnet's growth, drive a greater sense of urgency and enhance our focus on execution," a spokeswoman for the Phoenix-based distributor told CRN.

The decision comes less than three months after the company said it planned to cut $25 million in personnel and other expenses from its technology business after demand for data center hardware and software plummeted. That followed a 6.9-percent drop in year-over-year revenue for its third fiscal quarter, which ended April 2.

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The departure of Hamada – who had been with the company since 1983 – as CEO and from Avnet's board of directors is effective immediately, according to the company. The spokeswoman said Avnet will vet external and internal candidates – including Amelio – for the top slot, and expects to complete its search for a new chief executive within the next six months.

Avnet's stock opened Monday down 2.2 percent to $40.35 per share. The CEO change was announced before the market opened.

In conjunction the change in leadership, Avnet announced that sales in the Americas region of its semiconductor-focused electronics marketing business are expected to come in $100 million below the prior outlook due to an enterprise resource planning (ERP) implementation in the region. The region also incurred higher costs to maintain customer deliveries, Avnet said.

Moreover, company-wide earnings for the fourth quarter, which ended July 2, are expected to come in at between 80 and 86 cents per share, well below previous guidance of 95 cents to $1.05.

During the third quarter, revenue for Avnet's technology practice plunged 12.9 percent, to $2.13 billion, with all three business regions experiencing double-digit sales drops. Company-wide, revenue for the quarter fell to $6.17 billion, after accounting for changes in foreign currency exchange rates. That was well below Seeking Alpha's estimate of $6.31 billion.

"[Amelio's] proven expertise will be critical in accelerating Avnet's growth, driving an enhanced execution focus and implementing management systems to promote greater accountability," William Schumann, chairman of Avnet's board, said in a statement.

Amelio, who has sat on Avnet's board of directors since May 2014, expects to focus intensely on customer and supplier relationships in his first couple of weeks as CEO, the company spokeswoman told CRN. Amelio will also meet with Avnet's leadership team in operational reviews and drill down on the company's business strategy, according to the spokeswoman.

Amelio served as CEO of international oil-field services company CHC Group Ltd. from 2010 to 2015, president and CEO of Beijing-based Lenovo from 2005 to 2009, and president of Asia-Pacific and Japan for Dell from 2001 to 2005. He began his career with IBM in 1979, eventually rising to become general manager of worldwide operations for Big Blue's personal computer division.

"The board felt that Amelio was highly qualified and the right appointment for the interim role," the company spokeswoman told CRN. "[He] has extensive experience in the technology industry and deep understanding of the technology supply chain."

Hamada was elevated to CEO after nearly 30 years with the company. He joined the Hamilton/Avnet Electronics division in 1983 as a technical specialist, and also worked in sales roles before being named global president of Avnet Computer Marketing in 2002. A year later, he was named global president of the technology business and served in that role until 2006, when he became chief operating officer. Four years later, he was promoted to president and COO, then became CEO in 2011.