You’re Fired! Uber Isn’t the Only Company That Dumped Its Founder
Travis Kalanick is out at Uber. The ride-sharing company’s founder took an indefinite leave of absence, he told employees on June 13, 2017. Now, he’s resigning as CEO, amid pressure from investors. The move comes at the same time that Uber’s culture — including allegations of a toxic work environment for female employees — has come under intense scrutiny.
Kalanick is just the latest high-profile CEO to step back from their company. Founder firings, forced resignations, and leaves of absences aren’t unusual in the business world, particularly in the tech industry. Nervous investors and fed-up boards of directors will give founders the boot from their own company if they think that’s what’s needed to turn a business around. But does the strategy always work? Here are 15 founders who were pushed out of their own companies and what happened next.
1. Travis Kalanick, Uber
Why he was pushed out: Among Uber’s (and Kalanick’s) problems? A video in which the CEO was captured berating an Uber driver, reports of top execs, including Kalanick, visiting escort bars and other inappropriate office behavior, and multiple lawsuits and investigations into its business practices.
What happened next: Industry insiders are divided on whether the housecleaning will be enough to repair the company’s damaged reputation, the Los Angeles Times reported. But Uber addicts are sticking with the app, at least for now. The company says the scandals haven’t hurt ridership.
Next: This famous CEO eventually came back to the tech company he founded.
2. Steve Jobs, Apple
Why he was pushed out: Apple’s founder Steve Jobs was famously fired in 1985 after he butted heads with John Sculley, the man he’d recruited to be CEO. The board sided with Sculley, and Jobs was effectively ousted, banished to an office he called “Siberia,” according to ABC News. Jobs later called the experience “devastating.”
What happened next: Jobs’ comeback story is the stuff of business legend. He went on to found animation studio Pixar, and by 1997 he was back at Apple as the CEO, preparing to lead the company into its golden period. But Jobs said he wouldn’t have enjoyed his later success if he hadn’t been canned because the experience forced him to learn and be more creative. “I didn’t see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me,” he said during a Stanford commencement speech.
Next: There are no guarantees against getting fired, as this famous founder and pitchman discovered.
3. George Zimmer, Men’s Wearhouse
Why he was pushed out: “You’re gonna like the way you look. I guarantee it.” Men’s Wearhouse founder George Zimmer spent decades making that promise to shoppers in his company’s ubiquitous ads. But Zimmer was abruptly fired in 2013 after clashing with the company’s new CEO. The reports were that Zimmer was having trouble ceding control of the business he started.
What happened next: Men’s Wearhouse — now known as Tailored Brands — has faced challenges since Zimmer’s departure. It acquired competitor Jos. A Bank, but that chain has struggled, and its poor performance was one reason the company’s stock price tumbled 40% in late 2015. In 2016, Zimmer was even hinting he might try to buy back the company he helped build, though at the moment he seems more focused on his efforts to destigmatize marijuana use.
Next: This bad-boy CEO made a splash in the fashion world but got fired anyway.
4. Dov Charney, American Apparel
Why he was pushed out: In the early 2000s, hipsters flocked to American Apparel stores. The edgy apparel chain and clothing manufacturer sold made-in-the-USA T-shirts, sweatshirts, and leggings with a side of sex. But the company’s sleazy image wasn’t just smart branding — it was the behind-the-scenes reality. CEO Dov Charney’s reportedly slept with employees, danced naked in front of colleagues, and in one notorious incident in 2004 masturbated in front of a reporter for Jane magazine. The antics, combined with steadily declining business performance, led to his firing in 2014.
What happened next: Without its controversial founder at the helm, American Apparel ran aground. A few years later, the once-hip retailer was all but dead, its assets purchased by another company in a bankruptcy filing and the stores shuttered. The American Apparel name might live to see another day though. Its website is operational again. And the disgraced former CEO? He’s starting a new clothing company.
Next: This founder went from startup to CEO to unemployed in just five years.
5. Andrew Mason, Groupon
Why he was pushed out: Back in 2010, everyone loved Groupon, the daily deals site founded by Andrew Mason in 2008. Its 2011 IPO was the biggest at the time since Google. But success was short-lived. Mason’s leadership style was seen as juvenile, and the company’s accounting practices were controversial, according to Time. In 2013, as share prices declined, Groupon’s board showed him the door, just five years after he started the company.
What happened next: Groupon never regained its early luster. In 2017, the company was “still in transition — or struggling to turn itself around more successfully, depending on how you look at it,” according to TechCrunch. Mason has since launched a guided walking tour app called Detour.
Next: The rise and fall and rise again of a Twitter CEO
6. Jack Dorsey, Twitter
Why he was pushed out: Jack Dorsey helped co-found Twitter in 2006. He was put in charge of the fledgling social media company, but his management style rubbed people the wrong way, as did his apparent inability to address frequent service outages. By 2008, he was out as CEO, though he was still a passive chairman and a silent board member.
What happened next: Like Steve Jobs, Dorsey boomeranged back to the company he founded. The book Hatching Twitter alleges Dorsey orchestrated a campaign to get rid of Evan Williams, another co-founder, as CEO, so he could eventually return to the top spot, as Fortune reported. It worked, though his second run at the job, which began in 2015, hasn’t been entirely successful. User numbers are flat, and some people think Dorsey can’t run both Twitter and his other company, the payment processing service Square, at the same time.
Next: This Twitter founder says he feels “betrayed.”
7. Noah Glass, Twitter
Why he was pushed out: Dorsey eventually crawled back to the top at Twitter. But another of the social networking service’s founders is largely forgotten. Noah Glass reportedly came up with the Twitter name and was the company’s “spiritual leader,” according to Business Insider. But he was kicked to the curb by Evan Williams in 2006, and Dorsey became CEO.
What happened next: Glass has pretty much vanished. The bio on his mostly inactive Twitter profile reads “I started this.” “I felt betrayed by my friends, by my company, by these people around me I trusted and that I had worked hard to create something with,” Glass said in a 2011 interview with Business Insider.
Next: This founder’s firing made it into an Oscar-nominated film.
8. Eduardo Saverin, Facebook
Why he was pushed out: If you’ve seen The Social Network you know the story. Facebook CEO Mark Zuckerberg wasn’t happy with the way co-founder Eduardo Saverin was handling the financial side of the company’s business. As CNET explained, Zuckerberg and the company’s early investors formed a new company, used it to acquire the original company, and got rid of Saverin in the process.
What happened next: Zuckerberg is the fifth-richest person in the world, according to Forbes’ ranking, and his company, of which he’s still the CEO, is worth more than $430 billion. Saverin didn’t make out so badly either. He still owns shares in Facebook, which have helped turn him into a billionaire, too, though on a smaller scale than Zuckerberg. He’s worth $7.9 billion.
Next: An affair, but not his own, sank this former CEO and founder of a major electronics chain.
9. Richard M. Schulze, Best Buy
Why he was pushed out: Richard Schulze founded electronics giant Best Buy in 1966 as a music retailer. But he was forced to step down as chairman in 2012 after a scandal rocked the Minnesota company. The company’s CEO, Brian Dunn, had an affair with a subordinate, and Schulze knew about it. But he neglected to tell the board, HR, or anyone else, which led to his ouster, The New York Times reported.
What happened next: At the time, analysts thought getting rid of the founder could help the company in the long run. They seem to have been right. Best Buy’s sales and share prices are up, it’s benefited from the struggles of appliance retailers, such as Sears, and it appears to be holding its own against Amazon, according to CNBC.
Next: Why Yahoo fired its founder
10. Jerry Yang, Yahoo
Why he was pushed out: Tech CEOs just can’t seem to stay put at the companies they found. Yahoo founder Jerry Yang stepped down as CEO in 2008 due to shareholder frustration over his decision to reject a buyout offer from Microsoft. He resigned from the board in 2012.
What happened next: Carol Bartz, Yang’s replacement as CEO, lasted fewer than two years. The company cycled through a few more CEOs and interim CEOs before Marissa Mayer got the job in 2012. Now that Yahoo is officially part of Verizon, Mayer’s out, too.
Next: Bad weather put this airline founder and CEO’s career on ice.
11. David Neeleman, JetBlue
Why he was pushed out: David Neeleman founded JetBlue in 1998, but less than a decade later, he was out the door. One reason for his ouster? A massive ice storm at the airline’s JFK hub in 2007 that stranded hundreds of passengers. The incident cost the company $20 million in lost revenue.
What happened next: Neeleman’s founded another airline, Azul, which is now Brazil’s third-largest carrier. And he recently bought a controlling interest in another airline, TAP Portugal. The 2007 travel debacle didn’t do any permanent damage to JetBlue’s reputation. It’s currently America’s favorite airline.
Next: The rise and fall of the man once dubbed America’s most reckless billionaire
12. Aubrey McClendon, Chesapeake Energy
Why he was pushed out: Aubrey McClendon and a partner founded Chesapeake Energy in 1989. He was a pioneer in making use of new fracking techniques to get at natural gas, and his company eventually became the second-largest natural gas producer in the U.S. McClendon got rich in the process, but in a 2011 profile Forbes also noted he was “reckless, the alpha wildcatter with an off-the-charts risk tolerance.” His risky behavior caught up with him in 2013, when he stepped down as CEO after investigations revealed a blurring of personal and company business and possible antitrust violations.
What happened next: McClendon wasn’t technically fired, and he walked away from the company he started with millions. But he couldn’t escape his past. In 2016, he was indicted for allegedly rigging the price of oil and natural gas leases during his time at Chesapeake. The next day, he died after the vehicle he was driving crashed into a highway embankment at a high rate of speed. The company he founded is currently No. 343 on the Fortune 500 and is the largest natural gas producer in America, though revenues and profits have been falling because of a steep drop in natural gas prices.
Next: One of the architects of the mortgage crisis lost his job in the meltdown, but not his fortune.
13. Angelo Mozilo, Countrywide Financial
Why he was pushed out: Two words: mortgage crisis. Angelo Mozilo founded Countrywide Financial in 1968 and was a leader in issuing risky subprime loans that contributed to the collapse of the housing market in 2008. When the house of cards came crashing down, Mozilo was out, though he made $150 million selling shares in his company before its stock fell off a cliff and received another $115 million in severance, according to Forbes.
What happened next: Mozilo left after Bank of America bought Countrywide in 2008. He eventually paid a $65.7 million fine to the SEC, but Bank of America covered a portion of that sum, Bloomberg reported. But the civil case the government tried to build against him for his role in the mortgage crisis went nowhere.
Next: This founder said she was fired because she was a woman.
14. Whitney Wolfe, Tinder
Why she was pushed out: Whitney Wolfe helped co-found dating app Tinder. But she said she was forced to resign after another co-founder, Justin Mateen, started harassing her once their relationship ended. When she turned to other co-founder Sean Rad for help, he was dismissive. She also alleged in a lawsuit the company threatened to strip her of her title because having a female founder made the company “seem like a joke.”
What happened next: Wolfe sued and reached a settlement with Tinder. (The company didn’t admit any wrongdoing.) Then, she started another dating app, Bumble, which gives women more control over communicating with matches.
Next: Over-the-top greed cost this cable company CEO his job and his freedom.
15. John Rigas, Adelphia Communications
Why he was pushed out: John Rigas, the founder former CEO of cable company Adelphia Communications, was once named one of the worst CEOs in American history. In 2002, Rigas, his sons, and two other Adelphia executives were charged with “massive financial fraud.” According to the SEC, Rigas and others treated the company like a piggy bank, hid company losses, and inflated earnings information. Rigas quit under pressure and eventually went to prison.
What happened next: After the shady dealings of its founders were revealed, Adelphia collapsed in bankruptcy. Rigas served 12 years in prison but was released in 2016 at the age of 91 after he was diagnosed with bladder cancer.