Groupon’s board of directors has voted to replace co-founder Eric Lefkofsky as CEO with Rich Williams, the company’s chief operating officer. Lefkofsky will return to his previous role as chairman of the board, with current chair Ted Leonsis sliding into an independent director position. The changes are effective immediately.
Lefkofsky took over the CEO role on an interim basis in February of 2013 when the company fired then-CEO Andrew Mason and was desperate for stability. His interim tag was removed that summer. In an interview on Tuesday, he told Re/code he and the board have had fairly regular check-ins about when would be the right time to hand over the job, and that it became clear to all of them in the last six to 12 months that Williams was the right successor.
“I’m a builder and feel like I’ve done all the building here I set out to do and Rich is a better operator and a better manager and has spent a whole career at both,” Lefkofsky said in an interview withRe/code.
While Williams takes over a company with some financial metrics such as revenue and Ebitda in a stronger place than when Lefkofsky took over, Groupon’s market cap is just $2.5 billion and the company’s future continues to be cloudy as the daily-deal fad evaporates. Just last week, Amazon announced plans to shutter its daily-deals business.
Groupon has been on a years-long mission to cut its heavy reliance on email marketing and get people to come to its site and search for deals on products and services on a daily basis. To that end, Williams, who was Groupon’s chief marketing officer for his first three-plus years at the company, plans to increase marketing spend to attract new users to the new Groupon. In fact, the company said it would spend between $150 million and $200 million more than planned on marketing in 2016.
He also said the company’s Goods business, which sells physical products, plans to highlight more products with higher profit margins.
“There’s a benefit to being an internal CEO,” Williams said. “I don’t need the cliche 100 days … I’m going to move fast.”
The company said these changes will result in lower-than-expected guidance for the fourth quarter of this year. Groupon’s stock tanked in after-hours trading, falling more than 25 percent on the news of the CEO change; weak fourth-quarter guidance and increased marketing spending; and mixed third-quarter results.
Williams was most recently chief operating officer, after being promoted to the role in the spring. Before that he was president of the company’s core North America business.
Update: This story has been updated to show that Groupon’s stock plummeted more than 25 percent in after-market trading.
This article originally appeared on Recode.net.