In a sign of big shifts to come for a number of sectors, more CEOs left their jobs in February than in any other month since the start of 2020.
As many as 167 people left CEO jobs in February, up 49% from January and up 11% over the same time period in 2022, according to a report by Challenger, Gray & Christmas, a Chicago outplacement firm. The firm analyzed U.S. companies with more than 10 employees that have been in business for more than two years and used news reports, company announcements, and Securities and Exchange Commission (SEC) documents to track the data.
The jump in CEO exits is not the biggest number Challenger has recorded yet, but if the trend continues it could be a sign that long-term changes are ahead for many organizations. “It’s a surprisingly big number,” says Andy Challenger, senior vice president of Challenger, Gray & Christmas.
On the flip side, as more male CEOs leave their posts, more women are taking their place. An all-time high of 31% of new CEOs were women in the first two months of the year, up from 26% in 2022, according to the report. “It’s still far from equitable,” says Challenger. “But companies know it’s good for business to have more diversity at the top.”
The CEO departures underscore a shift in the economic environment from a growth cycle to an unpredictable, slower economy that’s dancing close to a recession. Many companies are demanding different kinds of leaders, says Josh Bersin, CEO of the Josh Bersin Company, which analyzes the talent market and trends impacting the global workforce. That has prompted many companies to shift their strategies.
“They need leaders to manage transformation, and there’s a lot of pressure on boards to get people who can do that effectively,” Bersin says. “They may need a different kind of CEO to see them through that phase.”
Late last year, Disney’s Bob Iger returned to the helm of the entertainment conglomerate, replacing his own replacement, CEO Bob Chapek, who was in place only two years. Last month, Starbucks CEO Howard Schultz stepped down—from his third term. He drove a growth strategy but has recently faced new scrutiny over the coffee chain’s labor practices.
Some sectors hit worse than others
It’s not surprising that the biggest CEO turnover in February occurred in the financial, healthcare, and technology sectors, which have seen the biggest layoffs.
Hospitals announced 18 CEO exits for a total of 41 in February, up 58% from February in 2022. Expect more to come, says the report, as hospitals consolidate and deal with worker shortages and cost increases, according to Challenger.
The tech sector has laid off as many as 130,000 people since 2022, and now those job changes are at the top: As many as 32 tech CEOs left their posts this year, up 19% from the same period last year. The financial industry, too, which is struggling with concerns about a recession and mortgage rate hikes, had the third-highest total of CEO exits with 33 leaders leaving their jobs.
Most often, CEOs leave an organization, despite the public announcements, because of a push from the board, Challenger says. But a chunk of CEOs retired—68 so far this year—similar to the number in 2022. Another 47 stepped down into a board seat or other C-suite role.
In the case of Alan Moore, burnout was a factor. Moore resigned in February as CEO of AdvicePay, a Bozeman, Montana financial planning payment tool. He had been running two companies—AdvicePay and sister company XY Planning Network—for seven years, and neither company is facing a major strategy shift. He says he became frustrated because he could never really turn off work and spend time with his young children at home.
“Being CEO is seriously just hard, and I could feel the burnout,” Moore says. Leading through the whiplash of hiring, remote work, a lockdown, and the Great Resignation only amplified the job. He gave up one post but kept the CEO title of XY Planning Network.
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