Carly Fiorina Sugarcoats Her Disastrous Tenure At HP
During a June 9, 2010 appearance on Fox News' On the Record, Carly Fiorina attempted to deflect criticism of her tenure as CEO of Hewlett Packard, claiming, "I'm really proud of my record, and the good thing about business is the facts are clear." The facts are clear, but they're nothing Fiorina should be proud of. She fired at least 18,000 people, sent jobs overseas, instigated a disastrous merger with Compaq, and was eventually fired.
Carly Fiorina Sugarcoats Disastrous Tenure At HP
VAN SUSTEREN: People that -- you -- the people who've come out against you basically say you were a rotten CEO of Hewlett-Packard. Were you a rotten CEO or not? Did you get rid of jobs? Did you ship them overseas? What's the story? What's your side of this?
FIORINA: Well, you know, I'm really proud of my record, and the good thing about business is the facts are clear. The numbers are clear. I managed HP through the worst technology recession in 25 years. And despite those tough times, we doubled the size of the business from $44 billion to $88 billion. We tripled the rate of innovation to 11 patents a day. We quintupled the cash flow. We improved the profitability in every product line. We created market-leading positions in every category in which we competed. And our stock out-performed the technology peer (ph) index by 23 percent.
Yes, we were in tough times, and some people, sadly, unfortunately, lost their jobs. But I know, like families and businesses know, that if you make the tough choices well, you emerge stronger. And so, in fact, net-net, we created jobs. [Fox News, 6/9/10]
Fiorina Fired At Least 18,000 HP Employees
Millionaire Fiorina Called the Outsourcing of American Jobs "Right Shoring." The San Francisco Chronicle reported, "Labor unions have battled 'offshoring,' which Fiorina calls 'right-shoring,' for decades, he said." [San Francisco Chronicle, 1/9/04]
Fiorina Defended The Outsourcing Of American Jobs. Investors Business Daily reported, "During their presentation, Barrett and Fiorina had to defend the tech industry for its growing reliance on overseas tech workers. IBM, Intel, Hewlett-Packard and others have moved many jobs offshore, including customer service call center operators and even engineers." [Investors Business Daily, 1/8/04]
Fiorina Laid Off Nearly 18,000 HP Workers During "Restructuring." The Omaha-World Herald reported, "Hewlett-Packard, based in Palo Alto, Calif., had a $ 903 million loss on revenue of $ 56.6 billion for its fiscal year that ended last Oct 31. According to a summary by Hoover's Inc., an Austin, Texas, provider of business information, Hewlett-Packard has undergone extensive restructuring under Chief Executive Officer Carly Fiorina. The company announced earlier this year that it planned to cut 17,900 people by October because of a weak economy and its merger with Compaq." [Omaha-World Herald, 9/29/03]
Fiorina Suggests Her Biggest Mistake Was Not Firing More People More Quickly. Fortune reported, "Fiorina does not agree, naturally, that there's been a brain drain (at HP). In fact, she believes that one lesson she's learned while running HP is that she should have moved more quickly in ejecting certain people. Smartened up now, she says, 'I would have done them all faster. Every person that I've asked to leave, whether it's been clear publicly or not, I would have done faster.'" [Fortune, 2/7/05]
Fiorina: "There Is No Job That Is America's God-Given Right Anymore." The San Francisco Chronicle reported, "Fiorina's statement that 'there is no job that is America's God-given right anymore' triggered particularly strong reaction. The pair spoke in Washington representing the Computer Systems Policy Project, a group of eight chief executives from the nation's top information technology firms." [San Francisco Chronicle, 1/9/04]
Fiorina Comments On Offshoring Enraged Workers Groups. The San Francisco Chronicle reported, "Comments made in Washington on Tuesday by Carly Fiorina, CEO of Palo Alto information technology giant Hewlett-Packard, and Craig Barrett, chief executive of Santa Clara chipmaker Intel Corp., drew an unusually strong reaction from workers, who suggested the pair forfeit their own highly paid jobs to Chinese or Russian executives working for a quarter of their pay." [San Francisco Chronicle, 1/9/04]
Enraged Workers E-Mailed Chronicle To Complain About Fiorina's Insensitive Comments. According to the San Francisco Chronicle, "But with unemployment at 7.2 percent in Santa Clara County in November, the latest figure available, Fiorina's statement hit a sore spot. 'I am curious how Ms. Fiorina would feel about her job being outsourced to China or India,' Sean Ryan of Alameda, where the county unemployment rate is 6.1 percent, wrote in a representative e-mail to The Chronicle. 'I am certain that there are many extremely bright, ambitious and successful executive types in those countries who would be able to do her job just as well if not better than she can at a cost savings to HP shareholders of millions of dollars per year.'" [San Francisco Chronicle, 1/9/04]
Centerpiece Of Fiorina's Tenure Described As "Total Flop" And "Disastrous"
Merger Failed To Produce for Shareholders, Make HP More Competitive. Fortune reported, "First, under the only lens that matters, did the famed merger that Fiorina engineered between HP and Compaq produce value for HP's shareholders? Second, with that merger nearly three years past, is HP in shape to thrive in its brutally competitive world? The answers are no and doubtful...This was a big bet that didn't pay off, that didn't even come close to attaining what Fiorina and HP's board said was in store." [Fortune, 02/07/05]
- Even Before Compaq Merger, Fiorina's Tenure At HP A Series Of Disappointments. According to the Economist, "She has had to warn repeatedly of disappointing results. In the nine months to July, HP saw its net profit fall by 82%, to $506m. The company has slashed costs, announced 6,000 job cuts and asked staff to volunteer for a temporary 10% pay cut. Although there had been some speculation that Ms Fiorina would be replaced, the takeover of Compaq shows that she has - at least for the time being - still got the backing of her board." [Economist, 9/4/01]
Centerpiece Of Fiorina's Tenure Described As A "Total Flop." The London Observer reported, "With hindsight, it's hard to see how Carly Fiorina, America's pre-eminent female executive, who was fired as CEO of Hewlett-Packard last week, could have survived. The centerpiece of her career - a $ 24 billion merger with Compaq - was a flop; HP's board was threatening to strip her of day-to-day responsibilities at the firm; As one of only eight women heading Fortune 500 companies, the HP/Compaq deal was Fiorina's fatal error: not just because the strategy was flawed - two years on it has not achieved its goal of improving cost efficiencies in HP's PC business - but also because she alienated too many people in the process of pursuing that goal." [London Observer, 2/13/05]
- HP/Compaq Merger Described As "Disastrous." According to the London Observer, "Since the merger, HP has lost market share and failed to revive its profit margins. It lost the number one position in personal-computer market share last year to Dell. While the share price of Dell has soared over the past 18 months, HP's has floundered. Indeed, the merger was so disastrous that Fiorina fought off three attempts to spin off HP's highly profitable printer business and cut the PC business adrift. After her departure last week, shares in the company rose nearly 10 per cent on that prospect." [London Observer, 2/13/05]
Fiorina's Personality And Management Cited For Failure. According to the International Herald Tribune, "Fiorina's personality and management style ultimately led to her demise. She used hardball tactics to suppress the opposition of Walter Hewlett, the company's largest shareholder and the son of its co-founder William Hewlett, to the 2002 Compaq merger...Last year, when the company's struggling corporate computer division failed to meet its sales growth targets, she abruptly fired three top executives in what many people, both inside and outside the company, saw as a public hanging." [International Herald Tribune, 2/12/05]
Hewlett Alleged Merger Would Result In Even More Job Losses. The Washington Post reported, "HP has said the merger would result in 15,000 layoffs. But Hewlett said in his filing that the company's management knew that it risked losing 24,000 jobs. Hewlett also referred to an internal company memo that notes that profits for the merged operation for 2002 and 2003 may be 'significantly below' the projections company executives have put before the public." [Washington Post, 3/29/02]
Fiorina Was Fired By Hewlett-Packard After A Tenure Mired By Scandal, Failure, Backstabbing & Embarrassment
February 2005: Fiorina Fired By Hewlett-Packard Board. According to the Associated Press, "Carly Fiorina's nearly six-year reign at Hewlett-Packard Co. ended abruptly Wednesday as board members forced her out, disappointed by her inability to transform a plodding technology giant dominated by printer sales into a more nimble innovator. H-P's stock, which has gone nowhere for two years and is down two-thirds from its peak in 2000, rose almost 7 percent after earlier soaring almost 11 percent on the news of her ouster." [Associated Press, 2/9/05]
- Fiorina's "Rocky" Tenure At Hewlett-Packard Marked By Scandal. The Washington Post reported, "But until recently, Fiorina's claim to fame was 5 1/2 rocky years at Hewlett-Packard, where she battled the company's founding families to push forward with a $19 billion purchase of Compaq Computer in 2002, then failed to create the profitable computer giant she had promised. In February 2005, she was publicly ousted by HP's board, but not before she ordered the first of a series of leak investigations that would spin into a highly publicized scandal." [Washington Post, 4/2/08]
Board: Fiorina Fired for Failing To Achieve Objectives. According to CBS/AP, "Board members said they fired Fiorina, one of corporate America's highest ranking female executives, because she failed to execute a planned strategy of slashing costs and boosting revenue as quickly as directors had hoped. 'She made a lot of changes, including the merger with Compaq, layoffs, and reorganizations. A lot of employees resented her leadership,' said CBSNews.com Technology Analyst Larry Magid. [CBS/AP 2/9/05]
Out Of Touch, Fiorina Described Her Relations With HP Board as 'Excellent' A Month Before She Was Fired. The International Herald Tribune reported, "Asked to describe her relationship with her board of directors, the embattled Hewlett-Packard chief executive, Carly Fiorina, replied with a single word: "Excellent." Perhaps she was in denial, or just out of the loop, but Fiorina's confrontational tenure as chief executive of the world's second-largest computer company was unraveling." [International Herald Tribune, 2/12/05]
- 2007: Fiorina Still "Mystified" By Loss of Board Support. According to The New Yorker, "Fiorina professes still to be mystified by her loss of board support. According to Keyworth, the answer is simple: 'Fiorina had a vision, and she did a phenomenal job acquiring Compaq and combining the assets. But we had to make the assets deliver. We had an execution problem. The stock took a big hit. She was a better saleswoman than a manager.'" [The New Yorker, 2/19/07]
2005: Secretive Handling Of Compaq Merger Deal A Factor That Doomed Fiorina. Fortune reported, "Meanwhile, she thinks back on the post-bubble days of 2001, when the Compaq acquisition was booting up, and argues that drastic action at HP was essential. The critical problem was buckets of red ink spilling from computers. And significantly, says Fiorina, 'neither the market nor the organization understood the difficulty HP was truly in.' She wishes now she had found some way to be more 'transparent' then about HP's problems. That would have prepared people for the merger. But candor, she maintains, would have also further damaged the company, hurting employees' confidence, sales efforts, and probably the stock price. So she kept quiet. This backward look, of course, can be viewed as somewhat suspect (or even 'self-serving,' as one institutional investor puts it), in the sense that it argues Fiorina then had to do something dramatic, like a huge merger.'" [Fortune, 2/7/05]
- 2008: Fiorina Said Capital Markets Need More "Transparency and Accountability." Fiorina said, "Capital markets work best when there is transparency and accountability, and we need more of both. We need to simplify the mortgage application process so people can understand it. Because managers did not fully understand a set of complex financial instruments, initial losses in the market spawned a more serious crisis of confidence." [RNC Victory Chair Fiorina Statement on McCain Housing Industry Remarks, 3/25/08]
Fiorina Offered More Style Than Substance During Tenure As Head Of HP. According to Fortune, "In the midst of all the competitive pressures bearing down on her, and in the struggle of managing the unwieldy company she created, Carly Fiorina sometimes talks as if she sees a vision all her own. She hauls it out in the opening lines of internal speeches, articulating her goal of making HP 'the world's leading technology company.' The ambition is a curiosity rouser because it implies that she has firmly in mind what company right now holds that title. But that turns out not to be true. ... But then, you wonder, if she doesn't know who the leader is now, how would she know whom HP has to pass and when to claim victory?" [Fortune, 2/7/05]