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Hewlett-Packard, the world’s second-biggest computer group, said on Thursday that Steve Smith, head of its $15bn services business, had resigned.

The unexpected departure marked the second loss of of a top executive within HP’s $33bn technology services group this month.

It came amid rumours that HP may be mulling a deal to buy Atos Origin, a European IT consulting group that has attracted the interest of private equity groups. HP declined to comment on the takeover speculation.

An HP spokeswoman said Mr Smith had resigned for personal reasons. She said Ann Livermore, head of the technology solutions group, would take over Mr Smith’s role while the company looked for a replacement.

Earlier this month, Todd DeLaughter, the former head of HP’s $1bn OpenView software business, resigned from the company to become chief exceutive of Opalis, a Canadian business sofware company.

Mr Smith had been head of services at Lucent and head of sales at EDS before being appointed head of HP’s services business in January 2005.

Revenue at HP’s services business grew just 1 per cent last quarter. HP attributed the sluggish growth to a focus on cost cuts and said margins had seen a strong expansion in the quarter.

Expanding HP’s services footprint has emerged as a top prioty for HP under the leadership of Mark Hurd, chief executive. HP is seeking new sources of revenue growth as it attempts to overtake IBM as the world’s biggest comuter company by revenues.

In July, HP announced a $4.5bn deal to buy Mercury Interactive, a business software group. The deal, which values Mercury at $52 a share, has yet to close. If it goes through the deal would mark HP’s biggest acquisition since its ill-starred $19bn takeover of Compaq, a rival computer maker, in 2002.

HP on Wednesday said it had extended its tender offer for Mercury for a fourth time in order to give Mercury shareholders time to review that company’s preliminary third quarter results. Mercury’s shares have traded on the over-the-counter market since they were delisted following options backdating at Mercury last year.

HP’s shares edged up 0.1 per cent on Thursday to $39.20.

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