Chuck Whitten, the co-chief operating officer at Dell Technologies Inc., will step down from the company next month at a time when it struggles to get to grips with a historic slump in demand for personal computers and infrastructure gear.
The news was announced by Dell Chief Executive Michael Dell in an email to employees late Friday. “After discussions with Chuck and the board of directors about the leadership profile the company needs in its next chapter, we have jointly decided that Chuck will depart Dell Technologies,” Dell said in the email, which was later posted on LinkedIn by Whitten (pictured). Whitten is set to leave Dell on Aug. 18, the company announced in a securities filing.
Whitten’s role as COO gives him a lot of visibility at Dell, as he has been tasked with running the company’s quarterly earnings calls alongside co-COO Jeff Clarke, instead of Dell himself. According to a Dell spokesperson, Clarke will remain as the company’s sole COO going forward.
The announcement comes as a surprise, since there was speculation at the time of his appointment in June 2021 that Whitten could be groomed to eventually succeed Michael Dell as the company’s CEO. Whitten was certainly well-suited to do so, joining Dell from the consulting giant Bain & Co., where he served as an outside adviser to Dell for over a decade. He was a notable influence on the company’s strategy as it shifted its focus from PCs alone to information technology infrastructure such as servers and storage arrays.
Dell reportedly handed Whitten a cash sign-on bonus of $5 million to tempt him away from Bain & Co., in addition to a $45 million “new hire equity award” in the shape of time-based restricted stock units with five-year vesting. As part of the separation agreement, Whitten is allowed to keep the 354,000 time-vested shares, which are currently valued at $19 million, according to the securities filing.
“I am incredibly proud of what we have accomplished not just over the last two years, but during the 14 years that I have had the privilege of working with the company both as co-COO and external advisor,” Whitten said on LinkedIn. “The integrity, grit, and customer focus of this team has been constant, and Dell’s future is incredibly bright.”
Rob Enderle of the Enderle Group said he was not surprised by Whitten’s departure because there was an expectation that either Clarke or Whitten would eventually become CEO, but for whatever reason that hasn’t happened. “I think the expectation was that Jeff was going to eventually move up or leave and Whitten would then become COO alone,” the analyst said. “But that didn’t happen and it doesn’t appear likely to happen in the near term either, so Whitten is out and the executive team at Dell will stabilize with Jeff Clarke in the role.”
The analyst added that Whitten was always taking a risk by becoming co-COO because one of the two individuals is going to have to leave at some point. Unfortunately for Whitten, Clarke was more senior and better-connected, so he was chosen to remain. “His departure could have been fully voluntary though, because people don’t like being two-in-a-box indefinitely either,” Enderle added. “In the end, the co-COO policy just aged out and this was the result.”
In any case, Whitten’s departure comes at a tumultuous time for Dell, which has faced a sharp decline in PC demand over the past couple of years. The PC slump has taken a significant bite into Dell’s revenue, and the company responded in February by saying it will cut about 6,650 jobs.
During his tenure, Whitten made several appearances on theCUBE, SiliconANGLE Media’s livestreaming studio. During his most recent appearance in May, he explained the company’s plans regarding hot trends such as multicloud and artificial intelligence:
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