February 9, 2005 8:18 AM PST

Fiorina steps down at HP

Carly Fiorina, the embattled leader of Hewlett-Packard, stepped down as chairman and CEO on Wednesday as HP tries to redefine itself for a new era.

Carly Fiorina

The company said the change was effective as of Tuesday, when the board made its final decision to ask Fiorina to step down. Robert Wayman, HP's chief financial officer, has been named interim CEO and has been appointed to the board. (To read Wayman's memo to HP employees, click here.) Patricia Dunn, who has served on the board since 1998, has been named chairman.

Fiorina's severance package is $21.1 million, a sum that includes stock options and a cash payment based on her salary and bonus, said HP spokeswoman Monica Sarkar.

According to the company, the departure stemmed from disagreements over how to execute the company's strategy.

"The differences came down to Carly catalyzing the transformation of HP. She did that in remarkable fashion and executed the merger with Compaq in superior fashion. But looking forward, we think we'll (need a CEO with) hands-on execution," Dunn said on a conference call.

Fiorina at CES 2005,
and other images.

Dunn said that the board had been discussing Fiorina's performance for several weeks and had sought outside advisers--including longtime counsel Larry Sonsini--to help the directors make their decision. She added that no single event had triggered her departure.

Fiorina acknowledged discord with the company's board.

"While I regret the board and I have differences about how to execute HP's strategy, I respect their decision," she said in a statement.

HP is scheduled to report its fiscal first-quarter results on Feb. 16. The company said Wednesday that results will be in line with expectations.

The departure of Fiorina, who arrived at the company in 1999 from Lucent Technologies, comes as HP struggles to achieve consistent growth in its financial performance, particularly in its enterprise group. The company reorganized last month, combining its PC and printer units.

Fiorina has resisted calls to break HP, a Silicon Valley icon, into two separate companies, with one focused on business customers and another focused on consumers.

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HP's merger with Compaq Computer, which was spearheaded by Fiorina, has also been criticized. Although the merged company has managed to wring out costs by combining operations, it has lost market share in certain areas, according to analysts.

Just two weeks ago, HP denied reports that it was planning to redistribute some of Fiorina's day-to-day responsibilities.

Walter Hewlett, a former HP director and son of a company co-founder, said in a phone interview that he was surprised by the decision.

"I know she's been under a certain amount of criticism, but (this) is somewhat unexpected," said Hewlett, who led an unsuccessful proxy

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Not a good fit.
I knew she was a goner. I've been saying this for almost two years now. I'm sure she's a nice lady, but she never inspired confidence and confidence is what a company like HP needs on so many levels.

I appreciate that not everyone is a good public speaker, but these days that is an essential part of being CEO--especially at company like HP. Every time I listened to Carly, I felt like I was watching someone in a junior high communications class: nervous, unsure of herself, not in command of her facts (even when she was), unable to connect with her audience, etc. This is not acceptable in a CEO.

I'd like to think she knew what she was doing behind closed doors, but if she did, it had yet to show itself in products and services.

No need to feel sorry for her though. I'm sure her contract will ensure she is well provided for. In addition, she is CEO material--but not right for HP.

Posted by sipeter (17 comments )
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Dancing in the streets
They'll have to close off Page Mill Road in Palo Alto this morning so that HP employees and "alumni" can dance in the streets, while Carly slinks off to count her multimillion dollar golden parachute. It's about time! My guess is that Mr. Wayman is just a temp during the search for a new CEO.
Posted by twasserman (11 comments )
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Fiorina steps down at HP
"Fiorina steps down at HP update Carly Fiorina ends reign as CEO and chairman."?

Big Big mistake I think. Even at first I didn't like her, she has kept the Number 1 company in the top position if you ask me? Are you asking me?

Every computer I own is a HP. Good product, very good. Even all my scanners and printers is from HP. I even own a Compaq laptop for Pete's sake.

She will make your not now a competitor a good top Chairman of the Board.

Well that's my take on this subject. I wish I had the funds to hire her for my small business.

Yours truly, Tommy Brown President Web Makr Express LLC www.webmakrexpress.com
Posted by oohdale (3 comments )
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You took the words right out of my mouth.

Absolutely hilarious that she couldn't even last 5 years as a CEO. Her stepping down is just more proof that her agenda was to execute the Compaq merger, take her share of dough, and take off.

Posted by katamari (310 comments )
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Poor Rich Girl
Severance package, she'll likely get only 5 to 6 million plus her deferred stock options of another 5 million to comfort her, she can file for unemployment too.

I understand Commodore is looking, or maybe a firm in Bangalore India . . .

<a class="jive-link-external" href="http://www.taphilo.com" target="_newWindow">http://www.taphilo.com</a>
Posted by taphilo-2003685639374287843630 (130 comments )
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A Tale Of Two Hewlett Packard's
Fiorina steps down at HP

A Tale Of Two Hewlett Packard's

Tale 1

Eight years ago a I bought an HP Omnibook 800 laptop. It was a marvel of engineering -- small, lightweight, fast, great looking, and RELIABLE. I still use today as an adjunct computer, even though it is slow by todays standards. Made in the USA.

Also eight years ago, as an IT Manager I inherited several HP and Compaq servers. The company was built on these servers, using them to deliver tech services to customers. Made in the USA.

Ten years ago I bought an HP 10B business calculator. It has a perfect form factor, and the batteries last for years. Made in the USA.

Tale 2

A year ago I bought an HP Pavilion 4600 laptop computer. Since purchase, it has been in the repair shop twice already. The Cardbus slot was faulty, requiring the motherboard to be replaced. The built-in mouse pad key got mushy, requiring replacement. The tab key stuck, I fixed that myself. The DVD/CD drive cannot read RW format (design flaw). The modem frequently drops a dial-up connection for no apparent reason. The AC adapter is plain bizzare. It sparks when I plug it in, and emits a HUGE amount of RF (how it passed FCC muster I'll never know). Recently, the hard drive began making "thumping" and loud scratching sounds when the bottom gets warm, it sounds like it is going to fail. The HP tech support people in India seem to know what they are doing only about half the time. The laptop is made in China.

Those HP and Compaq servers I used to run for the service business? They became expensive to buy and expensive to repair. A four-day service repair fiasco was the coup de gras. I replaced all the servers with Dell (a fairly new server player at the time)and never looked back. I subsequently bought several hundred thousand dollars worth of Dell servers, and later expanded that to Dell deskstops and laptops. When one of the Dell servers had a problem, the Dell tech was onsite in 4 hours -- on a Sunday morning. The server was expertly repaired and back online in 30 minutes.

HP Today
So this is HP today. Products that are unreliable . Shortcuts leading to substandard quality. Manufacturing and support moved to 3rd World countries. Massive layoffs and purges to rid the company of the old HP Way employees. Wow, great progress!

What does HP need to do to fix itself? To start with, hire a CEO that has an engineering background -- someone over 40 who knows what good engineering and quality mean. Unfortunatley Bill Gates, Michael Dell, and Steve jobs are not looking for work.

Today, would I buy equipment from HP or recommend HP products to my clients as a consultant? Other than HP printers, NO. Tomorrow? That all depends on HP. Maybe the place to start is to hire back some of those old crew cut, white shirt, tie clip, slide rule, HP Way engineers. Start making and supporting some products back here in the USA. I here land and salaries are cheap in large parts of rural America. The Carly Way - hacking away at staffing, outsourcing too much, excessive focus on cost cutting, buying companies, cheapening the product, surely didn't work.

Posted by Stating (869 comments )
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Fiorina Resignation
History wll recognize Carly Fiorina as the greatest leader of HP since it's founders. A sad event in the history of a great company.
Posted by (1 comment )
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HP survival?
Does the survival of HP depend so much on whos at the top"?

I think, that like other companies in this category, customer service is the key to whether or not a company will "make it".

HP's customer service has begun to take a back seat, although certainly not to the point of being non-existent, like Gateway's. But, my recent experience in calling HP to help with a new Pavilion, which had crashed and burned, was daunting; especially when I could not get a person who understood American English, let alone, speak it . . . They misdiagnosed my computer 3 times!

A correct diagnosis came as a result of me consulting with some geek friends! And it was just a matter of two sentences stating my computers symptoms.

Four calls and three days later, with HP, I gave up and agreed to pay $29.00 for a tech, who I COULD understand and who COULD understand me, to come to my house to fix the computer (the motherboard fried) that was still under complete factory warrantee!

Unacceptable. Clearly, communication is the key in this game. And HP has lost this round.

But, what choice did I have. Who knows? I couldn't understand the people who took my calls . . . and they clearly could not understand me.

Jon (Raleigh)
Posted by Jon (16 comments )
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