Rentokil Initial said the boss of its troubled parcel delivery service City Link had stepped down amid ongoing trading woes at the division.
City Link managing director Stuart Godman resigned by "mutual agreement" and Rentokil chief executive Alan Brown has taken over the running of the embattled company until a replacement is appointed.
Rentokil said difficult trading conditions meant City Link's performance in 2010 was unlikely to improve on the previous year, when it made adjusted operating losses of 2.7m.
The news suggests a worsened performance for City Link in the final quarter of the year.
It narrowed its operating losses by 2.3m to 4.7m in the first half and reported operating losses of 1.3m in the third quarter, which were the same as last year.
City Link last month admitted it had gone too far in closing depots and cutting staff and had been forced to outsource work to more expensive third party firms.
Service levels had remained excellent in the period, apart from in the past two weeks which had been affected by the snowy weather, it said yesterday.
However, Rentokil said its profits expectations for the year remain unchanged as the rest of the group, which includes pest control and washroom services, compensates for City Link's losses.
City Link is to recruit hundreds of drivers in the new year following its cutbacks as it looks to reduce its use of sub-contractors.
In the third quarter of 2010, it looked to make its network of depots more efficient by selling its Wednesbury hub and opening two new hubs in Warrington and Peterborough.