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HP's Blackmore And Milton Out: Page 2 of 4

HP attributed the disappointing results in part to a migration to a new SAP order-processing and supply-chain system. Fiorina said in a prepared statement that the problems have resulted in "immediate management changes," along with margin-improvement plans that she expects will return the unit to profitability in the fiscal fourth quarter. Chuck Kokoska, president of The Computer Specialists (TCS), a Whitesboro, New York-based HP Gold partner, said he has seen a number of problems with shipping delays for a wide range of products, including servers and storage.

"I don't know if this will solve the problem," Kokoska said. "There seems to be a major gap between the direction from upper management and the implementation at middle management. The problem pervades the entire organization. There has to be a fundamental change to move back toward the Compaq spirit of 'can-do' vs. the HP spirit of 'we'll think about it.' "

Fiorina outlined the executive changes in a memo to employees. Below is the text of the memo:

I am announcing the following management changes effective immediately.

Mike Winkler will replace Peter Blackmore as executive vice president of the Customer Solutions Group (CSG), with responsibility for all direct sales to the company's enterprise, small- and medium-size business, and public-sector customers worldwide. Mike will also retain his current responsibilities.