HP kicks out Apotheker, brings in Whitman

Meg Whitman has been installed as chief executive and president of HP, following the sacking of Leo Apotheker.

In a statement, HP said on Thursday that Whitman's appointment, as well as that of Ray Lane as executive chairman, followed "the decision that Léo Apotheker step down as president and chief executive officer and resign as a director of the company".

Apotheker had been chief executive since 1 November, 2010. During his tenure of just over 10 months, HP's share price fell 44 percent amid a raft of strategy changes. Apotheker's previous role, as chief executive of German software giant SAP, had lasted almost two years before that company decided not to renew his contract.

"I am honoured and excited to lead HP," Whitman said in the statement. "I believe HP matters — it matters to Silicon Valley, California, the country and the world."

"We are fortunate to have someone of Meg Whitman's calibre and experience step up to lead HP," Lane added. "We are at a critical moment, and we need renewed leadership to successfully implement our strategy and take advantage of the market opportunities ahead."

Lane described former eBay chief executive Whitman as "a technology visionary with a proven track record of execution" and "a strong communicator who is customer focused with deep leadership capabilities". He also pointed out that Whitman has been an HP board member for eight months, giving her "a solid understanding" of what the company does.

Shifting strategy

The nature of HP's products and markets is shifting, largely due to Apotheker's drive to have the company morph into an enterprise services firm, rather than a hardware maker.

I believe HP matters — it matters to Silicon Valley, California, the country and the world.

– Meg Whitman, new HP CEO

This strategy was exemplified by the three announcements in August: that HP would stop producing hardware based on the infant WebOS platform; that it would consider spinning off or selling its world-leading PC business; and that it would pay £7.1bn for the UK data analysis software firm Autonomy.

The market greeted these new strategic directions with scepticism. Analysts were also left confused when HP said it would roll out a final batch of the WebOS-based Touchpad tablet, to meet the demand caused by its end-of-line discounting.

"We very much appreciate Léo's efforts and his service to HP since his appointment last year," Lane said on Thursday. "The board believes that the job of the HP CEO now requires additional attributes to successfully execute on the company's strategy. Meg Whitman has the right operational and communication skills and leadership abilities to deliver improved execution and financial performance."

Enter Whitman

Whitman is best known for her role as chief executive of eBay from 1998 to 2008. During that decade, she oversaw the e-commerce company's growth into a web giant. However, she was also responsible for less successful decisions, such as eBay's disastrous $2.6bn (£1.4bn at the time) purchase of Skype.

After retiring from eBay, Whitman moved into politics for a brief spell. She stood as the Republican candidate for governor of California in 2010, spending $144m of her own money on a campaign that ended with the victory of Democratic opponent Jerry Brown.

Whitman's campaign was not helped by a scandal over her housekeeper and nanny, who turned out to be an illegal worker. She lost her election at the same time as former HP chief Carly Fiorina, a Republican candidate for Californian senator, was losing hers.

The first thing Whitman did on taking the reins at HP was to send out an email asking employees for suggestions about what to do next. HP's share price fell five percent on Thursday.

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