Bernard Ebbers, the brash executive who built WorldCom Inc. into one of the top telecommunications companies, has resigned, bowing to a plummeting stock price and government probes into accounting issues and personal loans he received.
Ebbers, 60 -- who is relinquishing his posts as president, chief executive, and board member -- will be succeeded by Vice Chairman John Sidgmore, the company said in a statement. Sidgmore, 51, has taken a back-seat role for about the past year, after having run the company's Internet arm, UU-Net.
Investors said it was a welcome shake-up in an industry overrun with debt and suffering from deep financial losses and steep stock declines.
"I was stunned quite frankly, but I think it's good for the industry," said one fund manager, who declined to be named. "Hopefully, we'll see more of this, that we'll get people who rationalize the business, no sacred cows. We need more of that around the industry."
Just two years ago, Ebbers' Clinton, Mississippi-based WorldCom was among the highest-flying firms competing in the heady telecom arena. But the costs of aggressive expansion -- largely through acquisitions -- and the rapid, global downturn in the telecommunications market undercut the company's growth.
News source: Reuters - Ebbers Resigns as WorldCom Chief Executive