HP’s new chief under no spin-off pressure

HP's new boss is taking a ‘wait and see’ approach on any spin-off plans for the US$80 billion computer giant.

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By  Peter Branton Published  April 10, 2005

HP's new boss is taking a ‘wait and see’ approach on any spin-off plans for the US$80 billion computer giant. Mark Hurd, who took over as HP's chief executive officer on April 1, has said he “received no preconditions” when he was offered the job and will do what he sees as best for the firm. Since the departure of Carly Fiorina, who was ousted as CEO in February (see IT Weekly, 12-18 February 2005) speculation has grown that HP would look at spinning off either its highly profitable printer business or, conversely, its low-margin PC arm. Hurd has, so far, refused to be drawn on this. “He [Hurd] signalled to us that he has no current plans to break the company up but Forrester believes that Hurd won’t be afraid to make that decision if necessary,” research firm Forrester said last week in an online advisory. At NCR, Hurd developed a reputation for cutting costs while delivering growth, and he has clearly been tasked with performing a similar feat at HP. “I see a company that is fundamentally strong,” he told reporters. “But it’s clear the company is not performing to its full potential,” he added. “Hurd did very well at NCR, so he is clearly somebody who can get to grips with the operational details and make a company more effective,” said Douglas Hayward, senior analyst at Ovum. However, Hayward said Hurd should look at reducing the range of markets that HP competes in. While he thinks that HP should look at spinning off its PC business in the near future, Hayward said this should not cause users problems. “I don’t think users should worry about divestments, as they are unlikely to be of strategic business units,” he said. “HP’s not going to divest the server business for instance, and it will continue to focus on its support arm.”

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