HP Chairman, CEO Carly Fiorina Resigns

by , 9:00 AM EST, February 9th, 2005

In a surprise move Wednesday, Hewlett-Packard announced that Chariman and CEO Carla Fiorina has resigned, effective immediately. Fiorina cited strategic differences with the company's board as the reason behind her departure.

"While I regret the board and I have differences about how to execute HP's strategy, I respect their decision," said Ms. Fiorina in a statement. "HP is a great company and I wish all the people of HP much success in the future."

Bob Wayman, H-P's longtime finance chief, was named interim CEO. Fiorina will receive a severance package worth $21.1 million.

Ms. Fiorina joined HP as CEO in July 1999 and guided the company through its $25 billion takeover of Compaq in late 2001, a move that she has repeatedly come under fire for.

In Ms. Fiorina's efforts to diversify HP's business away from printers, she took the company in other directions, landing a surprise coup in January 2004 when HP announced that it would soon begin selling HP-branded Apple iPods. In November of 2004, Fiorina announced that sales of the HP iPod were "very strong" and that she was looking forward to the future. In January 2005, she announced at CES that HP will soon start selling an HP branded version of the iPod photo.

While Ms. Fiorina's performance came under renewed scrutiny recently, "she downplayed the suggestion of friction, and said her relationship with the board remained "'excellent,'" according to The Wall Street Journal.

Financially, HP has done well under Ms. Fiorina's leadership, with profits and revenues both jumping substantially, in part due to the Compaq merger. For the fiscal year 2004, ending last November, HP reported net income of $3.5 billion, up 38% from the previous, and revenue of $80 billion, up 9%.

Nevertheless, the company continues to face pressure in several key markets. PC sales continue to erode to Dell and IBM and EMC are capturing significant chunks of the corporate computing market. HP's printing-and-imaging division continue to generate more than 75% of the company's profits.