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HP shares have fallen more than 40 percent since Apotheker replaced Mark Hurd, who resigned following a sexual harassment accusation.
Whitman stepped down from eBay in 2008, before making an unsuccessful run at replacing Arnold Schwarzenegger as governor of California in 2010.
We are fortunate to have someone of Meg Whitman’s calibre and experience step up to lead HP,” said Ray Lane, who was named executive chairman of the computer giant.
“We are at a critical moment and we need renewed leadership to successfully implement. Meg is a technology visionary with a proven track record of execution.”
Whitman’s hiring comes amidst a slew of leadership changes at HP. Ray Lane, for instance, has moved from non-executive chairman to executive chairman of the board of directors. According to a company statement, the board also intends appointing a lead independent director.
“These leadership appointments are effective immediately and follow the decision that Leo Apotheker step down as president and chief executive officer and resign as a director of the company,” the California group said.
Speaking about her appointment, Whitman said, “I am honoured and excited to lead HP. I believe HP matters — it matters to Silicon Valley, California, the country and the world.”
Addressing to decision to replace Apotheker, Lane said that the HP board very much appreciated his efforts and contribution to the company, but that “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.”
The leadership shakeup at HP comes as the firm struggles to find direction. Recently, for example, it killed off all production on its Touchpad tablet and its entire range of Web OS smartphones, a platform it had spent US$1.2-billion buying from Palm in 2010.
At the time it was reported that the company would be concentrating its efforts on creating software solutions for the business market.
HP also recently announced that it was exploring a spin-off of its PC unit and buying British enterprise software company Autonomy for $10.24-billion as it refocuses on software and technology solutions.
This announcement, made by Apotheker, saw HP shares plunge more than 20 percent in a single day.
Katy Huberty, an analyst at Morgan Stanley, said the change was “a step towards regaining credibility with investors” but warned that “the path to a full recovery of investors’ faith in management and the company’s earnings power will take several quarters, if not longer.”
Huberty said HP still faces “formidable challenges” as consumers shift away from PCs.
She said Whitman “brings strong technology industry relationships and leadership experience at a fast growing technology company but will need to prove to investors that she can make similar smart strategic decisions while running a much larger, more complex business” than at eBay.
Analyst Rob Enderle of Enderle Group in Silicon Valley said the fact that Ray Lane will be “a chairman with authority,” is key to HP surviving the shakeup.
Lane “is the guy running HP but doesn’t want to do it full-time so he brought in a more traditional CEO. Now, we have a CEO who is in effect a subordinate to the chairman.
“Whitman can take orders… With a strong leader on top of her I actually think this might be able to work.”