Hewlett-Packard Company HPQ or H-P has been dealt a blow in the leadership department, as Executive Vice President Bill Veghte is leaving the company, after being in charge for over four years. He has held positions of the COO and also Chief Strategy Officer during his career at H-P. Veghte will pursue a new role in another company after resigning this summer.

The resignation comes at a time when the tech giant is about to split into two companies from Nov 1 this year. The H-P board has appointed Chris Hsu as the chief operating officer of the new Hewlett Packard Enterprise. Antonio Neri, who has been serving as leader of the Enterprise Group (EG), will be starting a new journey as Executive Vice President and General Manager of the company.

Veghte stated in a press release, “The decision to leave a company and people you are passionate about is never an easy one," He continued, "It has been a privilege working with Meg and a great leadership team as we transform Hewlett Packard to help customers on their journey to the New Style of IT. HP is equipped to take the business to new heights with great leaders like Antonio Neri and Chris Hsu and the progress we have made over the last 4 years."

Veghte has been associated with the company since 2010. Before joining H-P as Chief Strategy Officer and Executive Vice President of HP Software, he was working as an executive office in Microsoft MSFT.

What’s Going Wrong with H-P?

H-P has been reporting sluggish results for the past one year.

In the second quarter of 2015, earnings of 87 cents per share declined 1.1% year over year.

Revenues of $25.5 billion were down 6.8% year over year and missed the Zacks Consensus Estimate of $25.8 billion. Revenues were hit by unfavorable foreign currency exchange rates. Notably, the company generates approximately 65% of revenues from outside the U.S. Also, lower sales across all its business segments negatively impacted quarterly revenues.

In fact, the entry of new software companies has also been a matter of concern for H-P.

Adding to the company’s woes, the recent forecast by IDC suggests that PC shipments will contract 4.9% in 2015, worse than its earlier forecast of a 3.3% decline. H-P has been struggling from the lower-than-expected demand for desktop and portable PCs and it now appears that this weakness will be protracted.

To Conclude

Losing a veteran who has played a major role in H-P leading right up to the separation of its businesses is surely a setback for the company. 

However, it is focusing on four planned areas, namely cloud computing, security, software and mobility.

We believe that these strategic initiatives will provide the newly split companies with the focus, financial resources and flexibility to quickly adjust to changing market and customer dynamics. We also believe that these steps will add long-term value for its shareholders.

Also, the split is intended to notify shareholders that the company will attempt to tap into high-growth businesses such as 3-D printing that will hopefully return sustainable cash flow and multiply earnings for years to come. 

Hewlett-Packard carries a Zacks Rank #3 (Hold).

However, some better-ranked stocks includeTech Data Corp. TECD and Ship Finance International Limited SFL, both sporting a Zacks Rank #1 (Strong Buy).

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