The company's management has been under fire for months by some outside investors, particularly by investment firm MMI Investments LP, which has held about 9% of Unisys stock.
Unisys said an executive search committee has been formed by the firm's directors.
"Mr. McGrath will work with the board of directors to ensure a smooth leadership transition for the customers and employees of Unisys," the company said in a statement Tuesday. The company added that the "directors and Mr. McGrath agreed that a change in leadership would best enable Unisys to move forward on accelerating execution of the company's strategy."
In its second quarter financial report, announced July 23, Unisys reported a loss of $14 million on sales of $1.34 billion.
Earlier in the decade, Unisys moved away from its origins in hardware manufacture and focused more on systems integration, IT consulting, outsourcing and maintenance as well as high-end server technology. While some areas continued to thrive the company failed to gain traction on an overall business plan.
In the meantime, MMI Investments flailed away at the company's "seemingly continuous stream of management operational and financial missteps that have characterized recent performance," according to media reports. MMI was successful in naming two directors to the Unisys board.
The company has a storied past. Its early computers were called "Univacs" and the Univac name was used generically in the emerging computer industry in the 1950s before IBM gave up its old tabulating machines and focused on electronic computers. In its employee rolls, the company counted J. Presper Eckert and John Mauchly, who developed the first working electronic computer. Before changing its name to Unisys, the company was called Sperry Univac.
McGrath took over as CEO in 2005, but the company has continued to struggle during his term in office. Restructuring charges have taken a toll on Unisys -- its 2007 fiscal year reported $66 million in restructuring charges on revenue for the year of $5.65 billion. Total losses for 2007 were $79.1 million.