After a 2–6 first round loss to Ken Doherty in the Masters, Williams revealed he was considering retirement from the game if he dropped out of the top 32 and was forced to play in all the qualifying competitions, although then only 32 years old. But he also claimed at the Welsh Open at Newport that this statement had been blown out of proportion, and that he would remain a professional. He began to show more consistency for the remainder of the season, reaching the last 16 of three ranking events and a run to the quarter-finals of the China Open, but he could not reach his first semi-final for two years, losing 3–5 to Ryan Day. At the World Championship he defeated Mark Davis; however, a 7–13 defeat to Ronnie O'Sullivan in the second round forced him out of the top 16, pushing him into the qualifiers for 2008/2009. In that match he was on the receiving end of a 147 break from O'Sullivan. On 8 July 2008 it was announced that Williams had split from his management company 110 Sport, following O'Sullivan and Stephen Maguire.