HP split expected after chief's sacking

Carly Fiorina. Picture / Reuters

SAN FRANCISCO - The sacking of Hewlett-Packard chief executive Carly Fiorina is being seen as a precursor to a break-up of the company.

Fiorina, one of corporate America's highest-ranking female executives, was fired as chairman and chief executive of HP on Wednesday after clashing with the technology company's board.

Board members said they forced Fiorina out after a tumultuous five years because she failed to execute a strategy of slashing costs and boosting revenue as quickly as directors had hoped.

Fiorina, who leaves with a US$21 million ($30 million) golden handshake, had championed the 2002 acquisition of Compaq Computer despite fierce resistance from shareholders and directors. Critics have called the merger a drag on profits.

Her departure came after months of speculation that HP needed a major shot of adrenalin to make it competitive with other technology companies, particularly rivals Dell and IBM.

Fiorina, 50, had tried to transform HP, founded in 1938, from a printer business into a broad-based technology giant.

She said: "While I regret the board and I have differences about how to execute HP's strategy, I respect their decision."

Fiorina apparently resisted the breaking up of the company - particularly the highly profitable printer unit - into segments for five years.

The board discussed and rejected the matter three times.

But former director Walter Hewlett, son of the co-founder, said board members should look at it again and analysts agreed.

The printer unit made up 68 per cent of the California-based HP's profit in the most-recent quarter.

Fiorina took the helm at HP in 1999. The next year, the company added chairwoman to her list of titles, making her the first woman to hold all three top posts - president, chief executive and chairwoman - at a major computer company.

Analysts say HP could now be split into three: the printer business, consulting and emerging technology.

- BLOOMBERG, REUTERS