Speculation rife over Fiorina's exit

Speculation is mounting over the nature of the "differences" with HP's directors that resulted in Carly Fiorina's shock departure from the company today.

Clive Longbottom, service director at analyst firm Quocirca, suggested that Fiorina was given her marching orders because of weaknesses at HP that could be traced back to the services part of the business.

"The idea was to move up the professional services tree and play against IBM Global Services, but instead HP ended up playing against Dell," he said.

Longbottom added that the incoming boss had to make HP compete better for high-end services work. "With the size of company it is, HP has to make a solutions play and for that you need professional services," he explained.

However, newly appointed HP acting chairman and chief executive Robert Wayman and new non-executive chairman of the board Patricia Dunn stressed that the decision had nothing to do with the future strategy of the company.

"The decision was not based on strategic differences. One of the board's duties is company and chief executive performance evaluation," said Dunn.

"What needs to be done is achieving the opportunities that are present in the remarkable collection of businesses and assets that are in the HP portfolio."

Dunn hinted that the reason for Fiorina's ousting centred on her hands-off management style. "The capabilities to do hands-on execution would be a better model for the chief executive," she said.

Bloor Research chief analyst Tony Lock believes it likely that HP will split the chief executive and chairman roles.

"There are lots of interesting paths HP could follow. I think the merger with Compaq went quite well; the technology is well embedded and HP seems to be keeping up the volumes so that seems to have gone fairly smoothly," he said.

"This is not a reflection on that, I think it is just complete disagreement at board level. It is not a crisis but makes for some interesting times."

Dunn and Wayman stressed that Fiorina was asked to step down and did so, and that there were no suggestions of impropriety. They added that the decision was not based on HP's results for the third quarter. It had been made over a number of weeks and Fiorina was informed yesterday

Wayman was keen to point out that HP will be carrying on business as usual and that there are no plans to spin off divisions for sale.

The remarks came after persistent rumours that the firm was preparing to float its highly profitable printing division into a separate company, and that differences over this strategy prompted Fiorina's departure.

"This is a unique company and is better together than apart," said Wayman. "For example our consumer PC [business] model is quite competitive. It is a profitable business."

The stock markets have responded well to the news. Shares in HP are up 10 per cent on the day's trading.