HP Looks Set to Fire Fired CEO LÃ©o Apotheker. Now What?
February 27, 2016
. Three weeks ago, we wrote that HP/Palm seemed to be actually be adding webOS engineers and managers; this week, reports emerged that nearly the entire webOS team would be sacked through massive layoffs.
Still, it wasnt clear what exactly was happening; industry sources I spoke to whod heard some of the earliest reports were equally inclined to see it as a trial balloon, an attempt by unhappy forces within HP to force the boards hand, or even some kind of complicated ruse to flush out bids for HPs personal computing division. All of them have a stake in preserving their own units and reputations; big shake-ups of the kind Apotheker proposed, coupled with his brief tenure and relative lack of allies within HP, were bound to lead to a large number of very powerful and deeply unhappy people.
So even if Apothekers ouster will satisfy those calling for someone to be held accountable for this mess, HP will likely be chaotic for quite some time.
Updates 2 and 3: HPs board did indeed name Meg Whitman its new CEO on Thursday. Update: According to multiple sources speaking to AllThingsD and the Wall Street Journal, the Hewlett-Packard board is expected to name Meg Whitman the new (not interim) CEO after the markets close today (Thursday). An interim CEO may simply carry out the planned personal computing group spinoff and try to keep the company afloat until it decides who would best lead the company going forward. The New York Times had the fullest account of the boards reported deliberations, citing unnamed insiders not authorized by the board to speak publicly.
Im really curious what Catherine Lesjak, HPs CFO and a one-time interim CEO, thinks about all this. Lesjak was Apothekers point person on the conference call breaking the bad news on future quarterly projections and supporting her bosss play to axe Palm and spin off the PSG.
Go Back to Top. Whatever forward might turn out to mean.
Early reports that HPs board was meeting to oust Apotheker and potentially replace him with ex-eBay head (and California gubernatorial candidate) Meg Whitman began filtering out through press leaks yesterday morning. Now HPs board looks set to kill Apothekers tenure to focus the company on finding new leadership.
Now, though, Apothekers ouster at least seems quite likely. The Times James B. Apothekers reign shows that when a new CEO tries to carry out the business vision of the outgoing chief, the company will lose its way.
After a string of disappointing quarters, Hewlett-Packard CEO Lo Apotheker killed the Palm hardware unit and proposed spinning off personal computing to focus the company on enterprise software. Those people dont play.)
Also, HPs upstream suppliers in China and Taiwan now say that ex-CEO Apothekers plan to spin off HPs PC and hardware division may be cancelled, meaning that HP will continue to be a major force in consumer computing after all. According to these unnamed sources (familiar with/briefed on the situation), the board either has met or will meet today to formally agree to generously sack Lo Apotheker by offering him a fat severance package, which these days is de rigueur for talented Fortune 500 CEOs who need to be quickly shown the door.
If HP does move to hire a new permanent CEO, all bets are off.
The HP board may not make a decision on Apotheker until as late as Friday, AllThingsDs Kara Swisher reports. Some even sued, claiming the companys executives misled investors about how badly it was stumbling.
Refocusing the company on enterprise and cloud may still make sense as a strategy, but the particulars of how, when or even whether that will happen cant be treated as certain any more.
This partially explains some of the strange HP news items that have filtered out since Apothekers controversial move to scuttle HPs TouchPad tablet and the Palm/webOS smartphone and hardware division. Stewart published a story treating the firing as practically a fait accompli, with on-the-record sources giving accounts of a deeply dysfunctional board ambivalent about hiring Apotheker in the first place. (If you want to hear some stone realpolitik Kremlinology, talk to people in the business-facing software business. Publicly, Whitman says shell continue to pursue the companys current strategies, but mostly confines that to the announced plan to acquire business software company Autonomy. The boards Raymond Lane also received a promotion, from Chairman to Executive Chairman. No word on whether Palms smartphone and tablet hardware division will get a reprieve or not. Skip To: Start of Article.
Add tanking stock, an inability to attract buyers for the PC division, increasing outflows to customers and vendors over the TouchPad debacle, and what seemed to many like an overenthusiastic acquisition price for British business software company Autonomy, soon both large and rank-and-file investors were profoundly displeased, too. Even if the Whitman trial balloon rumors turn out not to be true and most of the credible sources willing to dish about everything take pains to emphasize that discussions about Whitman are early, she may not be hired, and she isnt exactly a perfect fit it seems like the board is serious about making another major change, and that Apotheker is in trouble.
When you run a company as large and varied as HP, you effectively manage a team of junior CEOs who each are charged with giant companies