Cable & Wireless Worldwide has replaced its chief executive John Pluthero after just five months as it reported a £433m half-year loss.
The firm will now be led by former Vodafone executive Gavin Darby in an attempt to revive its fortunes.
In the six months to 30 September, turnover slipped to £1.07bn from £1.12bn last year.
It was pushed into a loss by write-downs totalling £624m, and it also said it was suspending dividend payments.
Cable & Wireless Worldwide specialises in supplying high-speed telecoms services to government bodies including local authorities and the police and fire services as well as larger businesses.
It has struggled in the face of the budget cuts imposed on government spending, the weakened economy and the split with its Caribbean telecoms arm in March.
Mr Pluthero took over the helm in June, after former chief executive Jim Marsh left after three profit warnings.
Mr Darby will join C&WW on November 28 on a salary of about £600,000 and a performance bonus of approximately the same amount.
Mr Pluthero will remain on the board until the end of 2011 and will stay with the business until March 2012.