Hewlett-Packard seems on the verge of playing CEO musical chairs yet again.
The company’s board of directors is apparently considering whether to eject CEO Leo Apotheker after less than a year on the job. Reports indicate that former eBay CEO Meg Whitman, who sits on HP’s board, could take his place as either an interim or permanent chief executive. HP has struggled for the past few quarters with lowered financial forecasts.
In August, Apotheker took ownership of a bold new strategy for the company. Under this plan, HP would spin off its PC division and end production of its tablet and smartphones. It would leverage its $10 billion acquisition of software maker Autonomy to recreate itself as a provider of enterprise software services. Suddenly, the HP board’s decision to hire the former CEO of SAP, itself a producer of business software and services, made perfect sense: HP was going to take several pages from the IBM playbook and turn itself into a hardcore player in the business IT space.
But even that strategy looks in jeopardy at this point. If Apotheker is shown the door, will that affect HP’s latest moves toward becoming a software-and-services provider? Will a new CEO attempt to reverse some of the radical changes announced in August, or keep HP plunging down the same path?
A CEO switch “would be a tactical move in a company that desperately needs a strategic one,” Rob Enderle, principal analyst for The Enderle Group, told eWEEK Sept. 21. “If it is going to make a change, this one needs to be handled better and remain in place long enough for HP to be seen as stable again or the firm is likely to start slipping again very shortly.”
For fans of the HP TouchPad, the company’s ill-fated webOS tablet, it seems unlikely that the shakeup will result in a miraculous resurrection. On Sept. 20, the company confirmed that layoffs had begun in its webOS group and Palm smartphone business, with some 500 employees expected to lose their jobs within the next few days.
“As communicated on August 18, 2011, HP will discontinue the development of webOS devices within the fourth quarter of fiscal year 2011, which ends Oct. 31, 2011,” an HP spokesperson wrote in a note to eWEEK. “As part of this decision, the webOS GBU is undergoing a reduction in workforce.”
After HP doomed the TouchPad, which suffered from poor sales, it radically slashed prices in order to clear out its inventory. That led to an abrupt spike in interest from consumers, who flocked to purchase a high-end tablet at a dirt-cheap price. Accordingly, HP plans a final production run to meet a last spike of demand. After that, it has repeatedly insisted, the TouchPad is done for good as an HP product. The company also wants to license webOS software to other companies.
But those layoffs seem to be the final nail in the coffin of its tablet dreams-whether or not HP chooses to bring a tablet to market at a much later date (particularly if it takes back its decision to spin off its Personal Systems Group, which makes PCs), even Apotheker’s ouster seems unlikely to bring the TouchPad back to life.