New Scientist publisher Reed Elsevier today announced the shock resignation of its chief executive just eight months after he took on the role.
Ian Smith stepped down by “mutual agreement” and has also left the board with immediate effect, the group said.
Erik Engstrom – currently chief executive of the Elsevier science division – has been appointed as his successor.
Mr Smith officially assumed the role in March, having been appointed last November to replace Sir Crispin Davis.
Formerly the boss at housebuilder Taylor Woodrow until its merger with George Wimpey, Mr Smith did not previously have experience in the media sector and is said to have agreed with the Reed board that the role was not right for him at a time of industry turmoil.
Anthony Habgood, chairman of Reed, said: “Ian has had the difficult task of leading Reed Elsevier during unprecedentedly turbulent economic times.”
The news is the latest blow to Reed as its advertising and promotion markets have been badly hit by the recession.
The Anglo-Dutch group said it was seeing lower book sales in the science and technology division and ongoing difficult trading conditions within Reed Business Information, with most of its major markets proving resilient but “not immune” to the recession.
It cautioned the trends seen so far in the second half would likely continue for the rest of the year and into 2010.
Reed tapped investors for £800m in late July to pay off some of its debt and it has been cutting costs across the business to counter a steep advertising slump.
It reported a 29% plunge in operating profits to £316m for the six months to June 30.
Shares in the group fell 5% today and Killik & Co analysts described news of Mr Smith’s departure as a “big disappointment”.
They said: “The departure of Ian Smith who only took up the position of CEO in March is a surprise and creates uncertainty, something the market never likes.
“While an internal appointment means a strategic announcement should be forthcoming fairly soon, we remain concerned given the uncertainty over current trading and the need for the group to invest in the business.”
