There was no bad blood affecting the decision, according to Best Buy, "no disagreements … on any matter relating to operations, financial controls, policies or procedures." Instead, Dunn's departure was part of a "mutual agreement" of the necessity "to address the challenges that face the company."
While Best Buy looks for Dunn's permanent replacement, board member G. Mike Mikan will take over as interim chief executive. Dunn had spent 28 years with the company.
The retailer is in revamp mode as it tries to claw back customers wandering over to competitors such as Amazon.com. Its holiday season sales were less than spectacular.
Last month, Best Buy said it planned to shake up its model, closing 50 of its big box superstores and shrinking the size of others. Space in some of its 1,400 U.S. stores will be walled out and sublet to smaller retailers.
It is aiming to slice $800 million off its costs by 2015, including trimming 400 jobs.
"I'm not satisfied with the pace or degree of improvement in our performance and transformation, especially given the opportunities we have in the marketplace," Dunn told analysts last month while announcing the company's strategy.
Dunn’s wasn’t the only major leadership change announced this week. On Monday, board members at