Infotech Lead America: HP chief executive officer Meg Whitman will have a clearer path to revive growth of the technology giant after the exit of Ray Lane as chairman.
HP had reported 6 percent decrease in revenues at $28.4 billion in the first quarter. HP’s net income declined 16 percent to $1.2 billion. It’s the sixth consecutive quarter that HP’s revenue has dropped from the previous year.
Bloomberg reported that Lane, a former president of Oracle, failed to use his experience in enterprise computing to help Hewlett-Packard’s turnaround.
Lane, 66, instead bore the stain of the disastrous 11-month tenure of former CEO Leo Apotheker and the company’s acquisition of software maker Autonomy, which led to a $8.8 billion writedown and accusations of accounting fraud.
The HP board is seeking a new chairman with global experience and who can devote more time and energy to revival efforts. Until then, Ralph Whitworth will serve as interim chairman.
In addition to Lane’s move, directors G Kennedy Thompson and John Hammergren are departing.
According to a CNBC report, HP chief executive officer Meg Whitman does not have any plans to break up the technology company and sales revenue growth will accelerate in 2014.
Whitman, who took over as CEO more than a year ago, has launched a long-term turnaround plan to grow revenue at the company. She said Friday that 2012 was the “diagnosis year” and that the company was focusing on the challenges and opportunities at hand to lay a better foundation for 2013.
In October 2012, Meg Whitman outlined progress made over the past year to stabilize the business and lay the foundation for a multiyear turnaround. The operating and organizational models have been integrated, centralized and streamlined, and a talented executive team is in place to execute the strategy.
HP is well positioned to extend its leadership into the major trends driving IT investment—cloud computing, information optimization and data security.
In May, HP initiated a multiyear restructuring designed to realign its cost structure and create investment capacity to drive innovation against its strategic priorities, strengthen market leadership and rebuild its balance sheet while returning capital to shareholders.
Despite the challenging environment, the company has maintained research and development (R&D) spending, along with a steady focus on preserving the long-term health of the business. The company is on track to deliver on its savings targets and complete the restructuring by the end of fiscal 2014.
Pix source: Bloomberg