Cable & Wireless Group CEO Francesco Caio will step down as it warned that earnings at its main British business will stagnate in fiscal 2007, an Associated Press report said.
The report said C&W will also split its business into two distinct units, one for its British operations and one for its international activities.
The company's EBITDA, for its British operations, excluding its Bulldog Internet unit but including the recently acquired Energis, in the 12 months to March 31, 2007, will be 'no higher' than the current year, the report said.
The report also said shares in C&W dropped 10.3% to 102.75 pence ($18.22) on the London Stock Exchange.
C&W has undergone significant restructuring over the past two years after pulling back from an overambitious 9 billion pound ($16.43 billion) plan to become a global telecommunications carrier for large businesses, the report said.
The company has shed its US and Japanese businesses and announced 600 job cuts across Europe in November, which included plans to cut 10% of its British workforce of 4,500 to reduce costs.
The company said there will be no replacement for Caio when he steps down after the fiscal year ends in March because of the division of the company, the report said.