HP Revamps Top Management to Boost Growth, Accountability

Hewlett-Packard Co. (HPQ) Chief Executive Officer Leo Apotheker elevated executives in the software, sales and services divisions, part of a leadership realignment aimed at boosting sales and making managers more accountable.

Bill Veghte, who runs software; Jan Zadak, executive vice president of global sales; and Dave Donatelli, head of the unit in charge of servers, storage, networking and some services, will report directly to Apotheker, Hewlett-Packard said yesterday. Ann Livermore, a 29-year company veteran passed over three times for the top job, will join Hewlett-Packard’s board.

Apotheker, who took the helm Nov. 1, is shifting managers to spur growth and slice costs after he cut $1 billion from his annual revenue projection last month. The changes establish clearer reporting lines and give Apotheker direct oversight of business computing, software and sales. They may also interfere with revival efforts as customers and staff adapt to new managers, ISI Group analyst Abhey Lamba wrote in a note.

“Senior management changes in the services group could impact HP’s ability to turn the business around in the near term,” he wrote yesterday. “Departure of senior management and appointment of a new segment chief could cause disruption.”

Photographer: Tony Avelar/Bloomberg

Ann Livermore, executive vice president of the enterprise business division, at Hewlett-Packard. Close

Ann Livermore, executive vice president of the enterprise business division, at Hewlett-Packard.

Photographer: Tony Avelar/Bloomberg

Ann Livermore, executive vice president of the enterprise business division, at Hewlett-Packard.

The moves reflect Apotheker’s aim, outlined March 14, to expand in software, cloud computing services and international sales. Todd Bradley, who runs the division that includes personal computers, and Vyomesh Joshi, head of the printer unit, will take on additional responsibilities to extend the company’s market share in China and India, respectively.

‘No Ambiguity Anymore’

Livermore, who joined Palo Alto, California-based Hewlett- Packard in 1982, will cease day-to-day management of the division that caters to large corporations. The move eliminates overlap in the oversight of enterprise computing, Shaw Wu, an analyst at Sterne Agee Leach & Co. in San Francisco, who rates the company “buy.” Livermore, who had supervised Donatelli, will continue to lead enterprise services while the company looks for a new executive to run outsourcing and consulting, the areas outside Donatelli’s purview.

“Dave Donatelli is now the undisputed head of the enterprise business,” Wu said. “There’s no ambiguity anymore.”

Chief Administrative Officer Pete Bocian and Chief Information Officer Randy Mott are also departing, effective immediately, Hewlett-Packard said.

Bocian had run real estate operations and other administrative functions. His job is being eliminated. Mott, who joined Hewlett-Packard in 2005, had worked at Wal-Mart Stores Inc. (WMT) and Dell Inc. (DELL), and was instrumental in the move by former CEO Mark Hurd to close 84 data centers to save $1 billion in costs. The company is looking for a new CIO.

Ann’s ‘a Fixture’

Apotheker’s realignment is likely to “increase accountability across the organization,” said Brian Marshall, an analyst at Gleacher & Co. in San Francisco, who has a “buy” rating on the shares. “He’s kind of a slow mover as we’re starting to learn, but he’s finally making some changes.”

Many large customers that long dealt with Livermore will need to forge relationships with new executives, said Sterne Agee’s Wu.

“Ann’s been a fixture,” he said.

Hewlett-Packard added 8 cents to $34.73 at 4 p.m. in New York Stock Exchange composite trading. The shares have lost 18 percent this year.

To contact the reporters on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net.

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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