Updated from 7:44 a.m. EST
CEO Wayne Inouye unexpectedly resigned Thursday as the No. 3 PC maker in the U.S. continues to struggles to right itself.
Rick Snyder, the Irvine, Calif., company's chairman, will replace Inouye on an interim basis.
Shares of Gateway were down 2.39%, or 6 cents, to $2.45 in midday trading.
Inouye's exit to "pursue other interests," comes a week after the computer maker
reported disappointing fourth quarter results.
Snyder, who served as Gateway's president from 1996 to 1997, will take over as CEO immediately, while Inouye will stay on in an advisory role to ensure a smooth transition. In a statement, Snyder said that neither he or the company's board of directors envision any major strategic changes at Gateway in terms of product offered or sales channels.
"Having just approved the 2006 annual operating plan, I and the other directors belive the company is essentially on the right course for long-term growth, and that our employees and senior management team have a sense of urgency about improving the company's financial results," said Snyder.
He noted however, that the company would use the opportunity "to re-examine the strategic direction of Gateway to fine-tune our products, services and approach to our Professional and Consumer Direct markets."
Inouye took the helm of Gateway in 2004, when the company merged with
, where he had served as CEO. He undertook numerous initiatives including shuttering Gateway's line of branded retail stores, selling instead through third party retailers, eliminating Gateway's line of consumer electronics products and sharpening the company's focus on sales to business, government and educational institutions.
But these efforts have been slow to pay off. Professional sales in the fourth quarter were down 9% year over year, as the company saw its unit shipments and the average prices of its products decline. And sales through Gateway's direct channel were 39% below where they were at the same time last year.
During a conference call following its earnings release last week, Inouye said Gateway had reached some key milestones in 2005, including generating its first full year of GAAP profits since 2000 and rebuilding confidence in Gateway's viability. But he said there was still a ways to go.
"We know we still have a lot of work left to do," Inouye said at the time. "Turnarounds take time and a great deal of effort."