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Last Updated: Thursday, 10 February 2005, 12:07 GMT
Bubble bursts for HP's Carly Fiorina
By Jon Cronin
BBC News business reporter

Carly Fiorina
Carly Fiorina masterminded HP's mega merger with Compaq

It is a fate that can beckon those considered to rank among the world's most powerful.

Carly Fiorina's swift rise to prominence seems to have been followed by her even quicker fall from grace.

As the 50-year-old chief executive of US technology giant Hewlett-Packard, Ms Fiorina was long regarded as the most powerful - and most recognisable - woman in business.

A big time player, she was a match for many of her male counterparts leading corporate America, and the mastermind behind HP's controversial takeover of Compaq.

So why has the Texan-born boss of a company which reported revenues of $79.9bn (43bn) in 2004 stepped down?

Stiff competition

In short, despite Ms Fiorina's celebrated status, all has not been well at the top of HP.

Ms Fiorina has said a dispute with the company's board over future strategy led to her resignation, after six years in charge.

Robert Wayman
HP's chief operating officer, Robert Wayman, takes over for now

But HP has been under pressure after missing earnings targets in the face of stiff competition from the likes of IBM and Dell.

Its shares have also remained worryingly low throughout most of her tenure, losing 63% of their value since she took over.

"I think the company's success will be my legacy," she said in 2002. "The company's failure will be my failure, with all the predictable consequences of that."

Those prophetic words ring true now, but not in the way Ms Fiorina would have wanted.

Her departure from HP drastically depletes the ranks of high profile women leading America's top companies.

Meg Whitman, boss of internet auction site eBay, and Anne Mulcahy, of office machines firm Xerox, remain in the top flight.

But Ms Fiorina had that other key ingredient - celebrity status.

Fortune's top woman

She burst onto the scene more than six years ago when Fortune magazine placed her at the top of its first ever ranking of the most powerful women business executives in the US.

At the time she held a senior post at Lucent Technologies, a company at the peak of fashion in the tech boom of the late 1990s.

The strategy of trying to generate economies of scale and improve market share and margins didn't come to fruition, and I think ultimately that did her in
Gary Schlosberg, Wells Capital Management

"It may surprise you that our number one woman is someone you've never heard of," Fortune said at the time.

But obscurity was unlikely to be something Ms Fiorina would be consigned to for long.

After dropping out of law school, she taught English in Italy and worked as a receptionist.

Her skills as a saleswoman helped her climb the corporate ladder at US telecoms giant AT&T, eventually becoming the chief executive of Lucent, the firm that AT&T spun off in 1996.

Mega merger

However, it was when she joined HP in 1999, with a brief to make the venerable computer hardware manufacturer more profitable, that she really hit the big time.

HP shares

Despite a huge slump in profits two years after her arrival, when the tech bubble finally burst, and claims from some quarters that she was "gambling with Silicon Valley's proudest legacy", Ms Fiorina steered the company towards its $18bn merger with Compaq.

The move was not without its critics, most notably Hewlett shareholder Walter Hewlett, heir to one of HP's founders, who failed in an attempt to block the deal in court.

HP's boss relished her success in pulling off the biggest coup in the industry's history.

"I think transformation requires risk taking. And I think frankly as well, business success in any industry requires risk taking," she told the BBC at the time.

Politics beckons?

A raft of job cuts followed as HP moved to reduce its workforce by 10% and squeeze billions of dollars in savings from the merger.

But despite the talk of greater synergies, the combined group's shares remained stubbornly low, and questions over the wisdom of the deal continued to be raised.

Last month, the Wall Street Journal reported HP was considering stripping Ms Fiorina of some of her responsibilities because of the company's performance.

HP denied the report at the time but it appears now the writing was on the wall for the company's flamboyant head.

"The strategy of trying to generate economies of scale and improve market share and margins didn't come to fruition, and I think ultimately that did her in," Wells Capital Management's Gary Schlosberg told the BBC's Today programme.

Ms Fiorina's legacy at HP would be the change in culture she brought to the company and her "aggressive style".

So, as chief financial officer Robert Wayman temporarily takes up the roll of his former boss, what next for Ms Fiorina?

A quiet life is unlikely, and many now tip this Republican to seek a career in politics.

Fiorina resigns as chief of HP
09 Feb 05 |  Business
HP shares tumble on profit news
12 Aug 04 |  Business
Hewlett Packard still struggling
19 Aug 03 |  Business

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