9 February 2005 Technology giant Hewlett-Packard has today announced that chairman and CEO Carly Fiorina has stepped down after disagreements about the strategic direction of the company.
The first signs of board-level disquiet over Fiorina’s leadership emerged last month, with reports that elements of her role were being taken away from her. Today’s announcement reveals that HP’s management board had finally lost faith in its CEO.
The departing Fiorina said in a statement: “While I regret the board and I have differences about how to execute HP’s strategy, I respect their decision.”
An email sent to HP employees by CFO and interim CEO Robert Wayman said Fiorina had “revitalised” HP. “She had a strategic vision that has given HP the capability to compete and win,” he added.
But while Wayman talked up Fiorina’s achievements, he failed to address the issues that saw HP’s board lose faith in its CEO.
Fiorina was the driving force behind the audacious $25 billion acquisition of rival computer maker Compaq in 2002. But the complex acquisition has failed to springboard HP into dominant positions in the PC and server markets — its primary purpose.
HP has also come under pressure to refine its strategic direction. Market watchers have been critical of HP’s attempts to be ‘all things to all people’ — alongside its hugely profitable printer business, HP also produces electronic consumer devices and high-end enterprise servers. Pressure has been mounting for HP to spin off its printer division.
Although profits and revenues at HP have both climbed since Fiorina’s appointment in 1999, stock has devalued by roughly 55% in that time. HP’s chief competitors, IBM and Dell, both weathered the post dot-com slump without such dramatic stock devaluation.
Prior to her tenure at HP, Fiorina was president of network equipment maker Lucent Technologies. There she was named as the most powerful female executive by Fortune magazine.
HP will deliver its third quarter results next week. At this stage there are no indications that Fiorina’s departure is linked to the results; HP has said it expects performance to be in line with previous guidance.