Should Hewlett-Packard's Meg Whitman be fired?

HP's CEO says the big write-down the company took on its $10 billion Autonomy acquisition was the fault of prior management. But investors are chafing at the company's weakening performance and lousy stock price.

By Charley Blaine Nov 21, 2012 6:44PM
A question that may get larger after Hewlett-Packard (HPQ) wrote off $8.8 billion of its 2011 acquisition of British software company Autonomy is this: Should Hewlett-Packard start looking for a new chief executive?

The idea may sound loopy. Meg Whitman, the current CEO, has only been in the job for 14 months. But in her tenure, the stock price has fallen some 48% overall. It's worse for the year, down 53% and down about 60% since peaking at about $30 on Feb. 16. Moreover, half the traders in an online poll want Whitman gone and maybe the board of directors, too.

Article continues below.
The stock closed Wednesday at $11.94, up 23 cents. So far this week, the stock is down 7.1%.

This year alone, HP has written off the bulk of two major investments -- Autonomy and the $13.9 billion acquisition of Electronic Data Systems from General Motors (GM) in 2008. Autonomy is the uglier. HP says Autonomy "used accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company prior to its acquisition by HP."

In other words, HP was the victim of fraud and has referred the case to U.S. and British authorities.

Meanwhile, HP's performance has been nothing to write home about. Revenue in the fiscal fourth quarter fell 7% to $30 billion, partly due to a rising dollar. Adjusted net income (taking out the write-downs) was off 3% to $2.3 billion. For the fiscal year, revenue was down 5% to $120.4 billion. Adjusted net income was down 23% to $8 billion. © ChinaFotoPress/ChinaFotoPress via Getty Images

In the fourth quarter, HP saw weakness in its computer business, its printer business, its server business and its services business. The only growth was in its software business, which, ironically, includes what was Autonomy.

It's in the process of reducing its staffing by some 29,000, about 8% of the total, by the end of 2013.

And the company hopes new personal computer, tablets and the like, based on Microsoft's (MSFT) Windows 8 program, will start to win share from Apple (AAPL) and Samsung. (Microsoft is the publisher of MSN Money.)

So is all this Whitman's fault? Well, she was brought onto the HP board by former CEO Leo Apotheker and did vote to approve the Autonomy deal. But, in fairness, the deal was brought to the board by Apotheker and strategy chief Shane Robison. And the accountants who were supposed to do due diligence didn't come close to the issues that HP says are there.

Most of the directors who voted for the deal are still on the board. Whitman says the problem was that the accountants didn't do a good enough job in their exams of Autonomy's books.

But one management consultant thinks Whitman and the HP board should be fired anyway. They aren't running Hewlett-Packard to become a pre-eminent technology company, says Adam Hartung, who runs Spark Partners outside Chicago.

Whitman, he added, was only writing off assets. "She's not doing anything to fix HP."

At best, HP is playing catch-up on smartphones, tablet devices and personal computers, Hartung said in an interview. It doesn't appear to be scoping out where technology is headed. As a result, he added, "Every month that this goes on is accelerating HP's demise."

Those are rough words for a company that has more than 300,000 employees worldwide. Hartung doesn't care. HP needs to have a courageous CEO and board of directors.

Hartung, who worked in strategic planning at DuPont (DD) PepsiCo (PEP) and Computer Sciences (CSC), sees two areas of opportunity that a company with its professional expertise could seize on:

  • Small mini-cloud networks. These would let a homeowner or business operator grab onto a network with a PC, smart phone and tablet and collaborate immediately with others.
  • Televisions that offer true two-way network connectivity. There's lots of talk about an Apple television or a Google television. But the hardware and software are not yet being imbedded in televisions. And there's a chance that the first company that makes this happen could transform technology.
Microsoft's Kinect technology, used mostly with the Xbox game player, offers that kind of potential.

To seize these opportunities means moving research and development away from HP's core product areas: PCs, servers and the like.

Apple faced the same dilemma in the late 1990s when it became apparent that its successful Macintosh line of computers showed clear signs of peaking growth, Hartung said.

Steve Jobs saw that the company needed something new so Apple could grow and thought a music player would work. That led to the iPod and then to the iPhone and iPad. The iPhone and iPad are now Apple's biggest revenue and profit drivers.
Nov 21, 2012 11:01PM
I think HP's auditors should be fired after giving HP a refund of all fees paid and then they should be sued in both civil and criminal courts?
Nov 21, 2012 10:38PM
California voters saw right through Whitman's BS, but HP's board got sucked in by her.
Nov 21, 2012 10:47PM
Not only Whitman should go but the bozo who hired her.  Otherwise, someone of the same caliber (or lack thereof) will replace her.
Nov 21, 2012 9:30PM
Pig Whitman turned ebay from a good idea with good intentions into a typical greedy, misguided corporate monster that is going to go down the second it gets any real competition (Google, are you listening?), and she has already begun screwing things up at HP.  If HP doesn't already see the horrible mistake they made hiring Pig in the first place (and get rid of her NOW) they deserve to go under!
Nov 21, 2012 11:56PM

HP can't afford to fire her. after all, if they do then they would probably spend another $50 million in a golden parachute!!!


Nov 22, 2012 9:54AM

The board made decisions that began to sink HP long before Whitman.  Clean house with the board first.

Nov 22, 2012 8:11AM
I don't own any HP stock.  However, I used to use Ebay a lot prior to 2001.  When Whitman took over she immediately raised Ebay fees to a level that was pure greed, thus raising income for Ebay and making her look good.  She is probably the biggest phony that ever came down the pike.  The people of California should consider themselves lucky they did not elect her.
Nov 21, 2012 11:06PM
According to Meg Whitman it's all George Bush's fault. Fire the bitch.
Nov 22, 2012 2:24AM
They should sue the TWO accounting firms.........KPMG and Deloit for Billions......
Nov 22, 2012 10:11AM
Were she a male CEO, she would likely have gone sooner...Equal opportunities include the equal opportunities to fail and be fired accordingly...'just like the men...'
Nov 21, 2012 6:51PM
avatar a joke

Why would I want every person in the world to see my ****.

Privacy issues are a big deal to me so **** FB

Nov 22, 2012 9:37AM
Yes in deed Whitman should be fired however so should the board for hiring her and approving the purchase of the companies now dragging them down. How about also firing their CFO who is as responsible for approving the acquisitions'.
Nov 22, 2012 1:15AM
HP please fire Whitman, she has done more damage to your company than anyone ever thought could be done.   As modernmystic states "..horrible mistake they made hiring Pig in the first place (and get rid of her now) they deserve to go under!!"  I have stated that many times when I first read about her being appointed CEO.  She may have a degree in business, but the only job she knows very well is "open your legs".

Nov 22, 2012 11:53AM
meg is stupid, the board is stupid, and deloite is stupid. All three entities are ruining HP and running it in the ground. Who ever did the audit on Autonomy should be fired at the least.
All of investors/stock owners can tell the company is run poorly and so can the Wall Street analysts.
So why is meg and the others still collecting fat pay checks?
Fire them all now.

Nov 22, 2012 11:59AM
 Meg needs a very profitable company that can run on it's own so she can take credit for it. She will just lay off some workers and that will improve the bottom line short term and then say look what I did  If anything goes wrong she will blame the people before her. I could do a better job for a tenth of what she is making and that would be huge money.
Nov 22, 2012 9:00AM
Now is NOT the time for some pretender - touchy and feely type to run Hp.
What Hp needs is a true passionate electronics engineer with some entrepreneurial spirits a la Steve Jobs - - - but over the years the Hp culture have killed all of such individuals...

I can do it for Hp but they will never hire me for my outspokenness, and honesty...

Folks like current CEO - sorry but NO HOPE whatsoever...
Nov 23, 2012 1:48AM
Fire Meg and the board they are bunch of lunatics for hiring a wrong manager and squandering  share holder 's money . Stock is tanking because .first hired Carly and now Meg.  The whole board need to go,
Nov 22, 2012 12:10AM
Well, you can only fire so many CEOs and there won't be any candidates left.  HP probably will not fir her since thy are running out of bullets.
Nov 22, 2012 10:24PM
HP has some of the most dysfunctional bunch of nut jobs I have seen on a board. They represent the narrow minded business types who choke a company to death. They all need to go. From Carly Fiorini onward they have been killing this company. It is amazing how such incompetent self-absorbed fools think they are capable enough to run the company. Steve Jobs made Apple successful through competence and self determination and he did it without a college education let alone a business degree. Meg Whitman is just another hack MBA hanger on born into wealth who seems to be adept at only squandering other peoples' money. HP needs to get someone who knows what they are doing.
Nov 22, 2012 10:22PM

The CEO from Hostess...Will be looking for a new Venue soon...Think his name is Raybum...

Yeah maybe he could help out HP..Yeah he might be good for a turnaround..Yeah I bet he would..?

Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

123 rated 1
262 rated 2
480 rated 3
651 rated 4
649 rated 5
629 rated 6
616 rated 7
496 rated 8
346 rated 9
111 rated 10

Top Picks

TAT&T Inc9



Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.