Sign in Subscribe
News agencies

Hewlett-Packard Taps Meg Whitman as CEO in Bid to Revive Sales

Strategic Insights

— 1 min read

In a surprise move, Hewlett-Packard Co. has replaced Chief Executive Officer Leo Apotheker with Meg Whitman, who has been tasked with turning around a computer maker plagued by slowing growth and missteps. Apotheker's ouster comes after he cut sales forecasts three times and made strategy shifts that left investors bewildered. The change is effective immediately, and Whitman, former CEO of eBay Inc., will face significant challenges in boosting revenue while alleviating investor concerns that have left Hewlett-Packard stock 47 percent lower under Apotheker's leadership.

Key Takeaways:

  • Meg Whitman, 55, has been appointed as the new CEO of Hewlett-Packard Co. with the goal of reviving sales growth and improving investor confidence.
  • Whitman has a mixed record at eBay, where she took the company public and pioneered e-commerce for small businesses, but also faced criticism for her inability to halt a slowdown in sales growth and overpaying for Skype Technologies SA.
  • At least 25 percent of Hewlett-Packard's sales come from consumers, leaving a significant portion of revenue that needs to be addressed by Whitman.
  • Whitman's experience leading consumer-oriented companies, such as eBay and Procter & Gamble Co., may not be directly applicable to Hewlett-Packard's business-computing divisions.
  • Shaw Wu, an analyst at Sterne, Agee & Leach Inc., expressed skepticism about Whitman's ability to turn around HP, citing her lack of experience in the business-computing sector.
  • Whitman's challenge will be to balance boosting revenue with allaying investor concerns, which have contributed to a 47 percent decline in Hewlett-Packard stock under Apotheker's leadership.
  • The board's decision to replace Apotheker is a nod to the need for a transition in leadership and a re-evaluation of the company's strategy.

Statistics:

  • 47 percent: Decline in Hewlett-Packard stock under Apotheker's leadership.
  • 25 percent: Percentage of Hewlett-Packard's sales that come from consumers, according to Shaw Wu.
  • 75 percent: Percentage of Hewlett-Packard's sales that come from business-computing divisions.

Sources:

  • Bloomberg News
  • Hewlett-Packard Co.
  • Sterne, Agee & Leach Inc.
  • Toronto Star, 2011.

Read more