Meg Whitman to take over as new Hewlett-Packard chief executive

• Former eBay boss chosen to replace Léo Apotheker at HP • Lawyers will be studying small print in Autonomy offer Léo Apotheker has been fired as chief executive of Hewlett-Packard and replaced with Meg Whitman, the giant technology company announced on Thursday evening. Whitman, 55, the former chief executive of eBay and candidate for California governor, and a member of the HP board since January, was confirmed as the replacement following a board meeting yesterday. Apothekerhad been at the helm at HP for only 11 months. Rumours about Apotheker’s replacement began swirling on Wednesday and came to a head in the meeting, the outcome of which was announced after stock markets had closed. The stock was down by about 1% in after-hours trading. Ray Lane, who has moved from non-executive chairman to executive chairman of HP’s board, said: “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 said the board believes “the job of the HP CEO now requires additional attributes”. The board also plans to appoint an independent director. HP is one of the world’s biggest technology companies, with more than 320,000 staff, annual revenues of $120bn (£78bn) – mainly from large “enterprise” customers – and profits of about $5.5bn. The management shake-up represents yet another turnaround strategy at one of Silicon Valley’s oldest – but most publicly dysfunctional – firms. Since joining HP in November, Apotheker’s strategic decisions had been a drastic reversal of the company’s self-image as an inventor of hardware: he announced that it would spin off its PC business, the world’s biggest, closed down its TouchPad tablet and webOS division, and announced a move into services, including the purchase of the British company Autonomy for $11.7bn. It is unclear whether the latter purchase will go ahead under Whitman. HP has four main divisions: Services; Storage & Networking; Personal Systems Group; and Imaging & Printing. Of those, PSG, which is the world’s largest supplier of PCs, is the biggest by revenue – but its 6% profit margin is the lowest within the company by some way. The Guardian’s own analysis shows that if the PSG division could be spun off without harming other divisions, HP’s overall profitability would rise from 7.7% to 12%. But investors were not pleased by the prospect held out by Apotheker, who got terrible ratings from his own staff. The abrupt dismissal follows the revelation that some members of the board did not even meet Apotheker before approving his hiring in late November because they were “tired of all the infighting” that had led up to the dismissal of the previous incumbent, Mark Hurd, in August 2010. That in turn is almost certain to lead to lawsuits from disgruntled stockholders who have seen the value of their holdings fall by nearly 50% in Apotheker’s time in charge of the company. It already faces such a lawsuit filed earlier this week, over the closure of the webOS division, on the basis that it had previously suggested the $1.2bn acquisition of webOS with Palm in July 2010 would play a vital part in the company’s future. Instead Apotheker shut it within 48 days of the TouchPad going on sale. Whitman has been a member of the HP board since January, and so is not tainted by the decision last year to hire Apotheker. But members of the tech community were doubtful that she was the right person for the job. Charles House, a veteran HP engineer, told the New York Times that she would be “an unmitigated disaster”, while Roger McNamee, managing director of Elevation Partners – which sold an interest in Palm when it was acquired by HP in 2009 for more than $1bn – said that “the notion that HP can be fixed by adding a celebrity chief executive is laughable.” Wall Street should react favourably to a new leader, even if it would be HP’s third in six years, after Carly Fiorina (fired in 2005) and Mark Hurd (fired in 2010). But not all analysts were convinced. Although Whitman, 55, grew eBay from a 30-strong company with $86m revenues to one with 15,000 people and almost $8bn revenues, she also oversaw the ineffective $2.8bn purchase of Skype, and left in 2008. Her strengths are consumer-facing, not in the enterprise. Carter Lusher, chief analyst at Ovum, said: “Whitman would do little for the confidence of HP’s enterprise customers. Whitman’s expertise lies primarily in the consumer market, and an interim leader will just prolong the sense of uncertainty.” Apotheker, who joined from the customer management software company SAP in early November, was unable to even turn to his employees for support: his approval rating among them was just 25%, according to the recruitment site Glassdoor. Hewlett-Packard Autonomy Technology sector Charles Arthur guardian.co.uk

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