HP and Leo

The Article I found was “Executives Churn at H-P”. It was in the Wall Street Journal on May 26th 2011. There has been some change at HP since Mark Hurd, the previous CEO left August 6th 2010. He had taken control April 2005. Since he was CEO he had made major changes for the better to the company. He reduced expenses by $15,200 in his time with the company. HP also surpassed IBM as the world’s largest technology company. He was forced out due to hiding a relationship with a marketing consultant. It is also said he misused company funds. Some thought this was a harsh punishment for this CEO especially is light of other CEO issues that have come out. For example: cooked books, stolen from the company and done much worse than Mark. On the Monday after Mark was forced out HP’s stock dipped 8%. After a short time with an interim CEO Leo Apotheker has been selected as the new CEO. Apotheker took over in November 2010. Since then over 10 executives have either left or been forced out. Some are leaving due to unhappiness with Apotheker’s strategies and moves. Others are being forced out or retired. This isn’t typical for such large companies. These changes might be due to their stock hitting a 52 week low. Leo Apotheker has already filled many jobs and has another 15 executive’s position to fill. He is also changing who they report to. Almost all of the new hires will report directly to him. I can see how when some new comes in there will need to be changes but that is a high amount of turnover in less than one year with the new CEO. The people that are left would be wondering “Am I next?” There are many strategic, tactical and operational decisions to make when the management changes. While some changes are needed how could they tell that quickly over 15 executives needed to be removed from the company? While Leo did come from another company as a CEO I personally would have a hard time being lead by a person who came in and cut most of my coworkers very quickly. In the long run it might be for the best of the company but I do not feel he has been there long enough to make that decision. Mark Hurd wasn’t forced out because he wasn’t good at his job. He was forced out due to a bad decision on is part. A decision in today’s world that is very common. I have also included a chart of HP’s stock prices in the past couple months.

Here is the link to the story I was talking about.
http://online.wsj.com/article/SB10001424052702303654804576345693663298956.html?KEYWORDS=executives+churn+at+hp