Fiorina rearranges the deck as HP feels Q4 pressure
Carly Fiorina, Hewlett-Packard Co.'s president and CEO of two months, today pulled absolutely no punches about the company's strengths and weaknesses during a presentation to security analysts.
One important revelation concerned the Unix business and a renewed emphasis on it as it relates to HP's e-services strategy. Fiorina said Duane Zitzner will now manage all Unix and NT server products. The Unix piece was formerly managed by Vice President Bill Russell.
One of Zitzner's tasks will be to bring the Unix division's "bloated" costs more in line with the rest of the company, according to a spokesman.
Secondly, Fiorina said that " despite an absolute winning Unix sever product line, our North American sales organization continues to under-perform. [As a result, ] poor performers have been removed."
It is unclear how many people have been fired.
Fiorina also said the Palo Alto, Calif., company will roll out a completely new compensation plan for the Unix server sales team on November 1. Spokesman Larry Sennett said HP expects to spark growth with the new compensation plan.
"She's saying she wants the sales force waking up sweating about making their quota and not worrying about when their tee time is," Sennett said. "There will be no more negotiating quotas."
Zitzner will also be responsible for implementing a more even distribution of investments towards Unix. Software investments have been weighed heavily in favor of Windows NT for the past few years, according to the spokesman.
More duties for Livermore
Moving on to other areas, Fiorina said that Ann Livermore now has global responsibility for all enterprise sales, service and support, and will manage HP's top 100 accounts along with individual client managers. She retains ownership of HP's e-services initiatives.
At the same time, Livermore takes on professional services and financial services. This is particularly important as HP looks to grow the business via innovative financing options such as hardware-for-equity-stakes.
Other organizational changes are in the offing, although details were scarce.
"We are also looking at improving the efficiency of our infrastructure across the company. We are replicating efforts across the company unnecessarily, and we are moving to address that," Fiorina said.
As it tries to cut costs, HP is preparing to report results of a fourth fiscal quarter whose revenue growth will be at the low end of the 10 percent to 13 percent previously estimated. Fiorina cited manufacturing disruptions stemming from the Taiwan earthquake for the results.
HP shares fell after Fiorina spoke, hitting a low of $86.56 before steadying at $87, down $5, in afternoon trading on the New York Stock Exchange.