Former Intel CEO defends Senate candidate Fiorina’s record at HP, which Boxer has criticized

Former Intel CEO defends Fiorina’s layoffs at HP

SACRAMENTO, Calif. — Former Intel Corp. CEO Craig Barrett on Friday defended the decision by GOP Senate candidate Carly Fiorina to lay off thousands of workers and ship jobs overseas as a necessary business move when she was head of Hewlett-Packard Co.

Barrett is part of a coalition of business leaders who have signed statements supporting Fiorina as she tries to unseat Democratic Sen. Barbara Boxer in California, who is seeking a fourth term. Others include Robert Bolingbroke, retired president of The Clorox Co., William Harrison Jr., former chief executive of J.P. Morgan Chase, and Peter Magowan, former president of the San Francisco Giants.

The response came after Boxer held a two-day, statewide campaign tour this week criticizing Fiorina as a failed chief executive who laid off about 30,000 workers and shipped thousands of jobs overseas during her tenure, which ran from 1999 to 2005.

“As CEO of HP, Carly Fiorina made a choice to lay off thousands of workers while she shipped jobs overseas and took huge bonuses and perks for herself,” Boxer campaign manager Rose Kapolczynski said in a statement Friday.

Barrett, who served at Intel the same time Fiorina led HP, told reporters Friday that the bursting of the dot-com bubble forced high-tech businesses to streamline and restructure to remain competitive. At the time, he said sales orders fell 30 percent, lower-level assembly jobs were migrating to Asia, and Fiorina was in the midst of engineering a merger with Compaq Computer Corp.

“When you add those three things up, her actions to move jobs offshore or in fact to lay off people, were absolutely required to keep Hewlett-Packard in business,” Barrett said. “And she really, I think, had no choice. She had to have this stiff back and to take those actions to preserve the enterprise.”

Barrett added that time has shown Fiorina made the right decisions to merge HP with Compaq despite the drama it created in the boardroom.

In 2001, Fiorina pushed for a merger with Compaq in a stock deal valued at more than $20 billion. The proxy fight that ensued pitted her and her management team against heirs of the company’s late founders, including David Packard and Walter Hewlett.

Fiorina’s success as a leader at HP has been debated. HP’s board of directors ousted Fiorina in February 2005, giving her a severance package of $21 million. She was succeeded by Mark Hurd, who is often credited with turning HP around.

Barrett said Friday it was Fiorina who laid the path for HP’s success.

“I think history will show or is showing Carly made the right decisions while she was there,” he said. “She kept HP at the leadership of the printer business, fully expanded their capability in the computer and server and enterprise side of their business, absolutely positioning HP for what it is today.”