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Fiorina Out at HP

2/09/2005 09:40:00 AM Eastern

Palo Alto, Calif. — Hewlett-Packard’s chairman and CEO Carleton Fiorina has left the company, effective immediately.

In a conference call with reporters, Patricia Dunn, director and non-executive chairman of the board, said the company’s board asked Fiorina to step down yesterday. The decision, which the board has been “deliberating for weeks and longer,” centered on questions of execution, not the company’s strategic direction or financial results.

“It was a matter of a hands-on execution,” Dunn said, though she would not elaborate on the specifics of the contention between the board and Fiorina.

The search for Fiorina’s replacement begins immediately. In the interim, Robert Wayman, chief financial officer and 36-year HP veteran, will step in as CEO, identifying his immediate responsibilities as “executing on the strategy as it is laid out.”

Wayman noted that despite fierce competition from other PC vendors such as Dell and Gateway, the company’s consumer PC business “has made great progress. We’ve gone from substantial losses to reasonable profits, though there are still improvements to be made.” The company’s consumer imaging group has also performed well, reaching leading market shares in several categories, he said.

HP’s enterprise and server business, on the other hand, have been a source of “significant disappointments,” Wayman admitted.

"Carly Fiorina came to HP to revitalize and reinvigorate the company. She had a strategic vision and put in place a plan that has given HP the capabilities to compete and win. We thank Carly for her significant leadership over the past six years as we look forward to accelerating execution of the company's strategy," Dunn said in a written statement on behalf of the board.

"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.

Fiorina, a former Lucent Technologies executive, joined HP in July 1999 as president/CEO and presided over a major restructuring of the company’s operations and became chairman in September 2000. She engineered the merger of HP and Compaq over objections of the families of company founders David Packard and William Hewlett.

During HP’s fiscal year, which ended Oct. 31, 2004, revenue was up 9 percent to $80 billion from $73.1 billion, while net earnings reached $3.5 billion, up from $2.5 billion a year earlier. HP’s fiscal first quarter ended January 31 and will report its performance for the period on February 16.

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