Article

HP CEO Fiorina resigns

Kate Evans-Correia

Carly Fiorina, Hewlett-Packard's controversial CEO, has resigned today, stating differences over the company's strategy.

Carly Fiorina

Robert P. Wayman, HP's chief financial officer, has been named interim CEO. Patricia C. Dunn, an HP director since 1998, has been named non-executive chairman, Both appointments are effective immediately, the company said.

"While I regret the board and I have differences about how to execute HP's strategy, I respect their decision," said Fiorina in a statement. "HP is a great company and I wish all the people of HP much success in the future."

According to Edward M. Broderick, principal analyst at Robert Frances Group, this move should not have come as a surprise.

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For the past two or three years, the problem has been in the execution and delivery.
Edward M. Broderick
principal analystRobert Frances Group

"HP has announced far-reaching plans to revamp its server/storage line," Broderick said. "But for the past two or three years, the problem has been in the execution and delivery. The numerous reorganizations of the server/storage executives have been witness to this."

Last month, the Wall Street Journal reported that HP's board of directors was considering a management reorganization that would distribute some of Fiorina's key responsibilities.

Broderick said HP will have to hire a CEO who will be able to analyze the company's position in the marketplace and implement radical changes.

Fiorina, who joined the Palo Alto, Calif., computer and printer maker in 1999 from Lucent Technologies Inc., is probably best known for her controversial role in HP's bitterly contested $19 billion acquisition of Compaq Computer in September 2001. Fiorina also consolidated HP's business units and stemmed losses in HP's PC division, in part through extensive layoffs and other cost-cutting measures.

But HP profits soared during her tenure, in part because of the acquisition of Compaq. In 2004, the company reported a net income of $3.5 billion, up 38% from a year earlier, while revenue at $80 billion was up 9%. Since 1999, revenue has roughly doubled, breaking a losing streak of nine consecutive quarters.

Broderick said HP still faces numerous problems. It continues to lose market share to Dell Inc. and its corporate-computing unit, which includes storage, software and server computers, has remained weak and unable to fend off competition from IBM and EMC Corp.

"The company has good technologies, but their to-market strategy has not been effective."

Matt Stansberry contributed to this article.


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