HP Enterprise Head Donatelli to Be Reassigned Today (Update)
Donatelli’s new role couldn’t be determined, but it will be announced along with HP’s quarterly results later today. His replacement as head of the Enterprise Group will also be named later today.
The news comes hours ahead of HP’s third-quarter earnings report, expected after markets close in New York. HP shares fell by more than one percent, to $25.52 a share, as of 12:40 pm ET.
The change is the latest in a series of shake-ups among HP’s top ranks. Earlier this year, Todd Bradley, the high-profile, longtime head of HP’s Personal Computer Group was reassigned from his role running the combined Printing and Personal Systems Group.
Donatelli had been in charge of HP’s Enterprise Group, which sells and maintains servers and other hardware, competing with companies such as Dell and IBM. The group also sells networking equipment in competition with Cisco Systems.
Sources inside the company said that CEO Meg Whitman is seeking new thinking at the top of her executive ranks. When she reassigned Bradley earlier this year, she was said to have wanted “fresh eyes” on the personal computer business. Dion Weisler was named to replace Bradley as head of PPG.
On Donatelli’s watch, HP’s Enterprise Group earlier this year launched Project Moonshot, a new server product that consumes less power and takes up significantly less space than conventional servers.
Donatelli had been promoted to run the Enterprise Group after a significant organizational retrenchment at HP was announced in March 2012. The Enterprise Group, a roughly $30 billion business unit in 2012, combines the enterprise, servers, storage and networking business unit with the technology services unit. For the six months ended in April, that unit reported $13.8 billion in sales, amounting to a decline of seven percent from the same period in 2012.
Update: Sources within HP just confirmed that HP’s chief marketing officer, Marty Homlish, has also been reassigned to a new role within the company. CNBC’s Jon Fortt reported this moments ago, and AllThingsD has confirmed it independently.
I’m told that the two personnel changes will be made in a separate announcement that will follow HP’s earnings report later today. Replacements for both executives will be named then. Their new roles will also be specified.
People will naturally speculate on whether or not these are “soft firings” by Whitman. Donatelli has been described by people familiar with operations inside HP to have been on the defensive, as sales results within the Enterprise Group have been underwhelming.
One factor that is certainly in play: HP’s share losses to Dell. In May, Dell founder and CEO Michael Dell and other senior executives bragged that they had won some “staggering” market-share gains in the server business, and that most of those gains had hurt HP, the world’s largest vendor of industry-standard servers. The results were later confirmed when the market research firm IDC pegged Dell’s global share of the server business at 28 percent, second only to HP’s 31 percent.