HP has confirmed the appointment of former eBay CEO Meg Whitman as its CEO, replacing Leo Apotheker, who has "stepped down" as president, CEO and director.
At the same time, Ray Lane has moved from non-executive chairman to executive chairman of the board of directors. HP said that its board intends to appoint a lead independent director promptly.
Former CEO Apotheker has been heavily criticised in recent months, as his strategy announcements caused confusion in the markets.
Last month, Apotheker announced the acquisition of UK software company Autonomy, and that HP would discontinue operations for its webOS devices, including the TouchPad tablet.
He also stated that the company would be spinning off its PC business.
These announcements are thought to be partly responsible for the 43 per cent slump in HP's share price this year.
Apotheker's unpopularity with the markets appeared to be confirmed by the 6.6 per cent surge in HP's share price as rumours of his removal circulated yesterday.
However, that surge had dissipated by this morning, the price falling back to the same level as before the rumours began, perhaps the result of a lack of confidence in Whitman, Apotheker's successor.
Apotheker was appointed to the role 11 months ago, but Ovum analyst John Madden said that the business was already struggling by the time he arrived.
"HP's services business has struggled for years with flat to single-digit quarterly revenue growth, the result of a drawn-out and arduous integration of its EDS acquisition, and a strategy that has failed to meet market and customer expectations."
Incoming CEO Whitman assured investors that she recognises the importance of HP's hardware business in a conference call yesterday.
"I want to reiterate our commitment to the hardware business. The vast majority of the revenue of this company is still in the hardware business," said Whitman.
However, HP still intends to pursue Apotheker's vision of growing its services business. Madden explained that Whitman understands the value of services.
"Whitman lacks experience of running a global enterprise IT vendor, but she does have experience as an enterprise IT customer, as CEO of eBay, and also understands the value of consulting services, having started her career at Bain."
Krista Macomber, research analyst at Technology Business Research, said that HP may even decide to retain its PC business following Apotheker's departure.
"HP will first reassure its customers and partners and then continue to expand its scope and broaden its offerings. We believe HP also will retain, develop and more fully leverage all its businesses, including PCs."
She added that the company would do this largely in order to recover some of the market confidence it has lost over the past year.
"We think that the uncertainty about its PC strategy undermined customer and partner confidence in HP's PC business and in its hardware business as a whole. We believe assuring customers it will retain and nurture its PC business is HP's most logical and likely course of action."