IXL Brings in New CEO Following Reorganization
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Atlanta-based interactive consultancy iXL's chairman and founder U. Bertram Ellis, Jr., will vacate the post of president and chief executive, following a decision by the company's board of directors to appoint a newcomer to the positions.
Beginning February 1, the company will be headed up by PricewaterhouseCoopers retail banking analyst Christopher Formant, who most recently led PWC's Global Banking Consulting Practice. Formant will also hold a seat on iXL's board of directors.
Ellis will remain chairman and will continue to focus on business development efforts for the i-shop. Ellis will also run the iXL Ventures portfolio.
"Chris is a tremendous leader whose skill in running a large, professional services organization will take iXL to the next level," Ellis said. "Chris knows our industry, and he is an expert in financial services consulting and CRM, in particular. He has successfully grown large organizations to world-class levels, and he is considered one of the top consultants in the world. He has a superb track record of developing and implementing leading-edge solutions and recruiting and energizing teams to perform at their peak. We are all very pleased to have Chris lead iXL."
Company officials also said that Formant's appointment is the "final step" in iXL's much-touted turnaround, which the company said would allow it to reach its previous promises of profitability by sometime in early 2001.
During fourth quarter, the company undertook a series of layoffs and office closings or spin-offs that reduced its workforce by 850, or 35 percent, and its expenses by about half, it said. It said it also shifted focus to its highest-margin work: financial services, retail, and travel industry clients. Those initiatives came on the heels of a bitter earnings surprise for investors -- the company posted a loss of $0.69 per share, way off the Street's expectations of a $0.14 loss.
"iXL is a much more focused company," Ellis said. "I believe that we now have the resources and leadership in place to become profitable again in early 2001, as we said we would."
iXL also closed a number of strategic deals during fourth quarter, including one that netted $20 million from human resources solutions firm ProAct Technologies, a company in which iXL owns a stake through its venture portfolio. Under the terms of the deal, ProAct acquired the rights to buy back up to 10 percent of iXL's interest in the company. iXL also closed a deal with offshore IT outsourcing firm HCL Perot Systems, which would provide iXL with outsourced software development services.
Formant's leadership and the company's cost-cutting maneuvers will be put to the test, however, as some industry insiders are predicting the worst quarter yet still ahead for Internet marketing and client services firms.
That's on top of a financial challenge for the firm: iXL must make the $50 million it has in cash last until it hits net profitability -- in third quarter, iXL posted a before-charge loss of $63.9 million.
But executives nonetheless remain optimistic.
"iXL has completed a remarkable turnaround ... I believe we can become profitable very quickly," Formant said. "My intention is to build a highly cost-effective competitor with the best new economy talent and energy mixed with old economy domain knowledge, low-cost offshore resources and Big 5-type implementation skill. The lessons we have all learned over the recent past will be enthusiastically applied."