Jay Bhatt will step down in December as chief executive of Progress Software Corp. to take the helm at an unnamed private company, leaving after less than a year at the Bedford company, which makes software used by big companies to integrate complex business activities.
Bhatt’s departure, announced Monday, comes just seven months after he launched a strategy to revive the company, which has experienced stagnant revenue growth over the past five years.
Under pressure from a dissident shareholder group, Bhatt unveiled a plan in April that included layoffs of 15 percent, or about 260 of the company’s 1,745 workers worldwide; the sale of 10 software product lines; and a $350 million program to buy back shares.
Bhatt also planned to redesign Progress Software’s products to function as cloud-based applications via the Internet, rather than installing the software at each company’s offices. In principle, cloud-based software services are easier and less costly to operate and maintain.
“My decision to leave Progress to pursue another opportunity as the CEO of a privately held corporation in another segment of the software industry represents the fulfillment of a lifelong passion of mine,” said Bhatt in a press release, “and has nothing to do with my strong belief in the company’s ability to continue accomplishing its strategic priorities.”
Phil Pead, chairman of Progress Software, said that despite Bhatt’s departure, the company intends to fulfill his vision for moving the company toward cloud-based applications. “The board believes that Progress is on the right path,” Pead said.
The name of Bhatt’s new employer was not disclosed. Company officials declined to comment further.
Bhatt, a former senior vice president at engineering software firm Autodesk Inc., was hired in December to succeed Richard Reidy. Bhatt found himself in charge of a company where revenues and earnings had been flat for several years.
The company generated $533.6 million in 2011 revenue, up just 1 percent from the previous year, and little improved from $494 million in 2007.
The company’s share price rose as high as $31 in early 2011 but has spent the past year well below $25.
Progress warned that the transition to a new chief executive would probably lead to weaker fourth-quarter revenue than previously expected.
The company had already estimated that revenue for the quarter would be down by as much as 2 percent from the previous year.
Daniel Sholler, vice president of research at Gartner Inc., a market research firm in Stamford, Conn., speculated that the Progress board might have soured on Bhatt’s plans for cloud-based software, and preferred to stick with the company’s traditional business model.
“They may just keep going and say, ‘We’re just going to run what we’ve got as efficiently as we can,’ ” Sholler said.
Mark Schappel, director of research at investment firm The Benchmark Co. in New York, said Bhatt might have resigned because the board could be interested in selling the company, an idea that Bhatt opposed and his strategy was designed to avoid.
Schappel was taken aback by Bhatt’s departure.
“He did what I would consider a very successful job of navigating through rough waters,” said Schappel. “I’m kind of perplexed why he’s leaving now.”
Progress shares closed down $2.96 Monday at $18.52 on the Nasdaq exchange.