But Fiorina praised HP workers for "making extraordinary sacrifices," and she handed out a one-time bonus equal to two days of salary, despite a weak financial performance that erased the normal annual performance bonus. Fiorina and HP's top executives opted not to receive the extra money, however.
Fiorina's remarks--contained in a letter sent to rank-and-file employees--come amid a brewing battle among shareholders about whether to approve HP's buyout of Compaq Computer, one of the largest deals in high-tech history. Opponents of the buyout include family members of HP's founders, Bill Hewlett and David Packard.
"What has made our lives particularly interesting lately has been the ongoing media coverage of what they're calling 'the feud between the newcomers--meaning me--and the HP family,'" Fiorina wrote. "Most of the media, especially here in the (San Francisco) Bay Area, is positioning the merger with Compaq and the recent actions by Walter Hewlett and David Packard as a fight between the past and the future--between the Hewlett-Packard of our co-founders and the future that we're trying so hard to position ourselves to achieve.
"I absolutely refuse to accept this line of reasoning," Fiorina continued. "And frankly, I get frustrated when I see lazy reporting on complicated issues. It is far easier to dream up a feud that doesn't exist than to research complex, far-reaching, industry-changing business concepts."
She added: "Some media reporters think they have a story they can use to sell newspapers."
Fiorina's letter was sent to employees Wednesday and made public in a document filed Thursday with the Securities and Exchange Commission.
The CEO also chided Wall Street analysts who have opposed the deal. "More than a few analysts are so focused on the short term that they fail to appreciate the fundamental, structural and economic changes occurring in our industry," she wrote. "But we all know better than to simply believe that the whole story consists of what you see on the surface."
Fiorina defended the buyout, arguing that it will improve HP's position in enterprise computing, improve the profitability of its PC business, and build up its services business. "While the storm of speculation swirls outside, I am truly excited about this merger and utterly convinced of its importance to our future," she wrote.
Fiorina said HP's revenue for the first fiscal quarter is expected to be "flat to slightly down" from the fourth quarter due to "normal seasonal effects." Gross margins are expected to be flat with the fourth quarter, and HP expects to hold expenses "approximately flat with the fourth quarter on a pro forma basis," she wrote.