Hurd had to do what he did because of his predecessor's disastrous merger with "Crapaq"(Compaq).All the gains from Hurd were short term. He hacked and slashed away the good developers, engineers, and managers to make the company look more profitable and well run. He cut down the "expensive" employees who just so happened to be the most talented ones. This looks great in the short run, but is disastrous long term.
I'm not saying that Leo is doing a great job. The webOS stuff was short sighted at best. But I am saying that Leo has a pretty rotten hand. It doesn't help that Hurd is still trying to destroy HP from the outside (See oracle pulling support for itanium processors).
http://en.wikipedia.org/wiki/Mark_Hurd
Hurd's management style was basically, take away all the resources from your employees and hope that they can still do the same job. Yes, it makes the company less expensive, but ultimately it does A LOT of damage.
Many people hated him for it, but he still had to do it.
Itanium is the "WebOS" of processors. It will die sooner or later. Wasting resources on software development/support doesn't achieve anything except rearranging the deck of chairs on the Itanic. Even RedHat and Microsoft dropped support much earlier than Oracle did.
Almost all Fortune 500 companies do this...It's called "Doing more with less". Payroll hours are the easiest expense to cut.