Unemployment Spikes among Computer Execs
Eager techies need not submit their resumes, because there are no vacancies; but weekend cleaning crews tidied-up vacant executive suites at Apple and HP in the wake of Friday’s sensational changes at the tops of the two computer giants’ organization charts.
On Friday, Apple Computer, Inc. confirmed that Mark Papermaster had left his job as executive in charge of hardware for iPhone. Also on Friday, Hewlett-Packard announced that Mark Hurd, the company’s much-celebrated CEO, had been relieved of his duties.
Bob Mansfield, Apple Computer’s executive in charge of Macintosh hardware, will take over management of iPhone operations.
Cathie Lesjak, Hewlitt-Packard’s Chief Financial Officer, will serve as interim CEO at the hallowed hardware maker.
Antenna “fail” dogged Papermaster’s steps.
At mid-day Friday, Apple officials and spokespeople refused to confirm reports that Papermaster had stepped-down because of the great iPhone antenna fiasco. Papermaster’s responsibilities included all aspects of iPhone 4’s design, development, and deployment, but he remained well below the radar when thousands of customers complained about dropped calls and poor reception. When he first showed-off iPhone 4 in January, Apple CEO Steve Jobs had called special attention to the handheld’s innovative antenna design as one of its finest attributes. Problems surfaced only after more than half-a-million units had been sold.
One analyst summarized, “The iPhone antenna debacle cost Apple a tiny fortune, and investors may have let the story slip from the headlines, but they did not forget. Papermaster stepped-up and did the right thing, falling on his sword for the sale of protecting the bottom line.” News of the shake-up had no measurable impact on Apple share prices.
Fierce fiscal disciplinarian, Hurd blows his own budget.
HP, the world’s largest technology company, did not dismiss Hurd as a result of sexual harassment charges as was widely reported; instead, the company fired him because of expense-account fraud resulting from an illicit liaison between Hurd and a marketing contractor. A lawyer for the marketing contractor did ultimately file sexual harassment charges against Hurd, but the company took its action after an inquiry into the improper relationship revealed that Hurd had mis-appropriated as much as $100,000 in corporate funds, financing expensive weekend get-aways and extravagant gifts. Because Hurd admitted the affair and acknowledged the facts of his misconduct, HP attorneys maintain the sexual harassment claims have no merit.
Just before reports of Hurd’s improprieties went public, the CEO offered to compensate HP for his expenditures, hoping he might keep his position. The Board of Directors rejected his offer and summarily dismissed Hurd. The irony of the situation did not escape HP-watchers’ notice. Hurd has driven the corporation, one of the oldest in the business, to the top of the industry’s profit rankings on the strength of aggressive cost-cutting and intense “fiscal discipline.” Investors, more concerned about profits that propriety promptly sold-off HP shares on news of Hurd’s departure. Shares fell more than 9% before Friday’s closing bell.
