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Reports: HP Considers Ousting CEO Leo Apotheker (UPDATED)

  • UPDATE 9/22: HP has officially fired Apotheker and named Meg Whitman CEO. Read the full story here.

The disarray at Hewlett-Packard Co. is taking on a new twist as the company's board is reportedly weighing the ouster of CEO Leo Apotheker.

HP's board is meeting on Wednesday to discuss replacing Apotheker, according to several published reports citing unnamed sources that are apparently informed on the matter. The news was first reported by Bloomberg. HP declined to comment.

Former California Republican gubernatorial candidate and onetime eBay CEO Meg Whitman is said to be a candidate to replace Apotheker, according to the reports. HP earlier this year added Whitman to its board following a massive shakeup of its slate of directors.

Wall Street welcomed the reports, with investors pushing HP shares up more than 7 percent for the day.

If indeed HP does fire Apotheker, it would come less than a year after he took the reigns over from departed CEO Mark Hurd, himself ousted following discrepancies on his expense reports and allegations of sexual harassment that were later unsubstantiated.

Apotheker was a former CEO of software giant SAP, a role he also held for less than a year. His tenure at HP has been shaky. For three consecutive quarters, HP has lowered its revenue forecasts.

Then came a series of bombshell announcements last month, including HP's plan to evaluate the sale or spinoff of its PC business, its planned $10.3 billion acquisition of software provider Autonomy, and its decision to cut the cord on the TouchPad, the slate computer designed to compete with Apple's iPad.

The moves have raised numerous questions. While HP is looking to emphasize higher-margin growth areas such as software and services, it has also positioned itself as a supplier of the complete IT stack. Though PC manufacturing is a notoriously low-margin business, HP is the market-leading supplier of PCs, and gains economy of scale across its hardware businesses given its huge clout as a purchaser of computing components such as memory, CPUs and disk drives. Also, critics questioned the wisdom of pre-announcing the possible divestiture of its PC business.

Apotheker's decision to jettison HP's slate and mobile phone business also came as a shock, coming about six weeks after HP released the TouchPad slate. Prior to the about-face move, HP had talked up the TouchPad and the webOS platform that powers it as key components of the company's push into cloud computing.

Meanwhile, HP's agreement to acquire enterprise search vendor Autonomy has had critics questioning the $10.3 billion price tag (see "Will Autonomy Save HP?"). Autonomy had sales of less than $1 billion last year, meaning HP has agreed to acquire Autonomy for 11 times its revenues.

About the Author

Jeffrey Schwartz is editor of Redmond magazine and also covers cloud computing for Virtualization Review's Cloud Report. In addition, he writes the Channeling the Cloud column for Redmond Channel Partner. Follow him on Twitter @JeffreySchwartz.

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Reader Comments

Thu, Sep 22, 2011 Glenn Koster Hutchinson, KS

As one with long time ties to HP (dating back to 1976), I have been alarmed at the destruction of HP and the total dismantling of the HP Way. HP has been in turmoil ever since the arrival of Carly on the scene. Since that point in time, no one within HP or outside of HP has been able to feel comfortable that any decision from HP will be based on sound judgement.

Wed, Sep 21, 2011 Joe Dyck

Get rid of Apotheker, in fact HP should re-hire Hurd. It is time to quit firing/forcing resignation of Executives for activies that have nothing to do with their job performance. It would have been better to keep Hurd and take away a year or two of his bonuses, or some other punitive non-terminating measure. Apotheker doesn't seem to have a clue how to run the ship!

Wed, Sep 21, 2011 Ed Podowski United States

"Also, critics questioned the wisdom of pre-announcing the possible divestiture of its PC business." You have to have wisdom to question it! HP hasn't done anything right for years. PC and componets have been fail at an alarming rate. Partner programs dismantled or should I say, "Partners scammed into taking bogus certification tests." We dropped HP. We did not want to play in their game any more. Proud to be an X HP Partner.

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