RALEIGH, N.C. – The Blackwater name is gone. So is the focus on the security business that made it famous. Now the founder who built the private company into one of the world's most respected — and reviled — defense contractors is stepping aside as its chief executive.
Erik Prince's decision Monday to relinquish his role as president and CEO underscored how hard the company now called Xe — pronounced like the letter "z" — is working to bury the Blackwater brand and move its focus further away from the security contracting that severely tarnished its reputation.
Prince appointed a new president and chief operating officer in a management shake-up that he said was part of the company's "continued reorganization and self-improvement." It comes less than a month after changing the company's name to Xe in an effort at re-branding.
"As many of you know, because we focus on continually improving our business that Xe is in the process of a comprehensive restructuring," Prince wrote in a note to employees and clients. "It is with pride in our many accomplishments and confidence in Xe's future that I announce my resignation as the company's Chief Executive Officer."
Although Prince will retain his position as chairman of the company, the company said he is removing himself from the day-to-day operations. Spokeswoman Anne Tyrrell said he plans to spend more time with his family and seven children, adding he plans to open a private-equity venture.
Joseph Yorio, recently a vice president at DHL and a former Army special forces officer, will serve as president, replacing retiring executive Gary Jackson. Danielle Esposito, who has worked within Xe for nearly 10 years, will be the new chief operating officer and executive vice president, the company said.
The CEO position remains open.
With an auto parts inheritance, Prince founded Blackwater in 1997 with some of his former Navy SEAL colleagues. They initially envisioned a world-class training facility to support law enforcement and military. But after Sept. 11, the bombing of the USS Cole and the start of the Iraq War, the company developed a large presence in providing private security.
The company's lucrative contract to protect U.S. diplomats in Iraq comprises about one-third of Xe's revenues, but the State Department announced it would not rehire the firm after its current contract with the company expires in May. The company has one other major security contract, details of which are classified, and executives have said it will continue doing such work until at the U.S. government's request.
Prince said in an interview in January that losing the contract would be damaging.
"It would hurt us," Prince said at the time. "It would not be a mortal blow, but it would hurt us."
That said, executives have long bemoaned what the work in Iraq has cost the company. A 2007 shooting in Nisoor Square involving Blackwater guards drew outrage from politicians in Baghdad and Washington and demands that the company be banned from operating in Iraq.
Late last year, prosecutors charged five of the company's contractors — but not Blackwater itself — with manslaughter and weapons violations. In January, Iraqi officials said they would not give the company a license to operate.
Xe has already been expanding into other lines of business. It has built a fleet of 76 aircraft that it has deployed to such hotspots as West Africa and Afghanistan.
The firm continues to expand training for law enforcement, with a renewed focus on international clients. Last year, some 25,000 civilians, law enforcement and military personnel were trained by the company.
The company is headquartered in Moyock, about 150 miles northeast of Raleigh.