Mark Hurd's inglorious exit and HP's future

HP lost nearly 10 per cent of its value Friday on the sudden news of chief executive Mark Hurd's departure.

While HP's explanations have sometimes raised more questions than they've answered, it seems clear that the head of the world's number one personal computer company has been brought low by some fiddled expenses.

It's a sad end for a man who some have credited with turning the company around after the dark years of Carly Fiorina. Hurd cut jobs and costs aggressively, shedding 10 per cent of the workforce in his first year, and took a symbolic 20 per cent pay cut (it was made up in options) while the rest of the staff lost five per cent. Wall Street loved it after half a decade of private hairdressers and corporate jets.

Even the most basic costs were managed. The number of applications used by HP was slashed, and the internal IT department was cut by more than half. Hurd watched the pennies, and the company was rewarded with solid growth and leadership in the laptop and PC markets.

Hurd used this as a basis for a series of acquisitions, including EDS, 3Com and Palm. These strategic purchases are still being integrated, a process not without its teething problems, but they look to stand the company in good stead. His departure won't be mourned by many at HP, but I doubt there will be too many parties either.

Sure, it hasn't all been plain sailing, but Hurd managed to survive the pre-texting scandal and the company prospered. That was the situation yesterday, yet apparently HP was worth a tenth less this evening.

The company's capital base hasn't changed, it's simply the traditional knock on the share price following news of this kind. All that remains now is to pick a successor.