HP Axes CEO Apotheker, Meg Whitman Takes Over

By Chris Preimesberger  |  Posted 2011-09-22 Print this article Print

Hewlett-Packard forces out its second CEO in 13 months and replaces him with board member and former eBay CEO Meg Whitman. Leo Apotheker leaves the company after less than a year on the job.

PALO ALTO, Calif. -- Hewlett-Packard on Sept. 22 fired CEO Leo Apotheker, the man it had selected to lead the company into the 21st century, after 11 months on the job.

HP's embattled board of directors immediately installed one of its newest members, former eBay CEO Meg Whitman, 55, to replace Apotheker on a permanent basis. It had been widely speculated that whoever replaced Apotheker would do so in an interim role.

HP, the world's largest IT company by sales volume, whose rock-solid administrative reputation for 60 years has turned simply rocky in the last decade, is shifting away from the personal computing sector to focus on the more profitable enterprise software and services markets. Apotheker, 58, who came to HP from German enterprise software maker SAP with great fanfare in September 2010, turned out not to be the person to lead the way.

Apotheker was fired because of "his poor execution and a lack of leadership," a source told The Wall Street Journal.

Former Oracle President and current venture capitalist Ray Lane has moved from non-executive chairman to executive chairman of HP's board of directors, and the board intends to appoint a lead independent director promptly, HP said. With the exit of Apotheker, the HP board now has 13 members.

Whitman (left) joined the board in January 2011 with four other new directors after losing the previous November to former Gov. Jerry Brown as the Republican candidate for governor of California. She becomes the second female CEO of the company. Carly Fiorina, who ran unsuccessfully on the Republican ticket for the U.S. Senate seat held by incumbent California Democrat Barbara Boxer, served as HP's CEO from 1999 to 2005.

The news came two days after HP announced that is starting layoffs of as many as 500 workers in its webOS division, after stating a month ago that it was shutting down that operation. However, a source at the company told eWEEK that the pink slips are now being withheld until "further notice."

The HP board also is reconsidering its Aug. 18 announcement that it will spin off or shutter the company's market-leading PC business, sources with knowledge of the company told eWEEK.  

Great Ups, Downs in Short Tenure

Apotheker (pronounced Appo-tecker) had seen great ups and downs during his brief time at HP. On his watch in February 2011, HP launched its first tablet PC (the TouchPad) and two smartphones (the Pre3 and Veer), all of which run on the webOS system HP inherited when it acquired Palm Computing for $1.2 billion in 2010.

At that time, Apotheker (right) announced that HP had decided to propagate the webOS to every computer it makes -- laptops, desktops, servers, storage arrays and printers -- and that the webOS would run "alongside" Windows, Linux and other operating systems. But it was never made clear exactly what that potential OS handshake would do to improve the devices.

After the TouchPads and phones came into the marketplace in July 2011 and didn't sell well, Apotheker replaced Jon Rubinstein, head of the webOS group, on July 11 and announced it would pull all the webOS computers and phones from the market. HP then decided to lower the price of the TouchPads to $99, and they promptly became the best-selling such device on the market until they sold out.

Meanwhile, the stock price continued to tank. Later, on Aug. 18, Apotheker announced at the company's quarterly earnings conference call that HP had decided to do away with the webOS division entirely, as well as the long-established and highly successful Personal Systems Group, which recorded $41 billion in sales in 2010.

Largely as a result of all this uncertainty, HP saw its stock price plunge by as much as 47 percent while it cut revenue forecasts at least three times. At the same time, Apotheker proactively tried to shift HP's focus to software, announcing that it was going to buy infrastructure software maker Autonomy for $10 billion to boost its enterprise software portfolio in search, content management and several other areas.

Although the Autonomy transaction has not yet closed, it likely will be consummated despite the change in leadership.

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on Salesforce.com and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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