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HP Cuts More Jobs

Dan O'Shea
5/23/2014
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It was business as usual at HP late Thursday, meaning the computing hardware/software company announced another round of job cuts and suffered the embarrassment of news being released earlier than planned.

HP Inc. (NYSE: HPQ) CEO Meg Whitman said during the company's second-quarter earnings call that HP is planning to cut up to 16,000 more jobs on top of 34,000 cuts already announced as part of a corporate restructuring program. This is the second time in two years the number of planned job cuts has jumped -- it started at 27,000. HP launched a major corporate turnaround strategy in October 2012. (See HP to Axe 27,000 Staff and HP Gives 2013 Outlook, Details Revamp.)

It is unclear which units and areas of expertise will be most affected by the latest cuts. HP has been widely criticized for continuing attempts to squeeze more money out of the fading PC hardware market, but it recently has made a concerted effort to become more of an SDN player. Software could remain a point of opportunity if HP doesn't put too many software-related jobs on its cut list. (See HP Shines Brighter on OpenDaylight and HP Beefs Up Its SDN Portfolio.)

HP declined further comment in an email exchange with Light Reading.

The second-quarter results actually met analysts' estimate with earnings of $0.88 per share. Overall revenue slipped about 1% from the same quarter last year to about $27.3 billion. However, if those numbers were not completely overshadowed news of the job cuts, they also were overshadowed by the fact that they became available while stock markets were still open, rather than after the closing bell. This was initially thought to be another of HP's infamous leaks, but later reports suggested the earnings release went public early by accident.

— Dan O'Shea, Managing Editor, Light Reading

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DHagar
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DHagar,
User Rank: Light Sabre
6/2/2014 | 12:38:51 PM
Re: Happy Memorial Day Weekend HPers
@Susan,  Absolutely, the fact that there are not more specifics, as you and Brian point out, suggest it is not strategic; it may be more tactical.

The cuts can be beneficial if they are building a strategic advantage, not just buying time until we figure out what works.
briandnewby
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briandnewby,
User Rank: Light Sabre
6/1/2014 | 10:23:38 AM
Re: Happy Memorial Day Weekend HPers
I think the short answer is that the only way out is to be acquired, or, maybe, acquire.

HP seems to still have panache with servers and printers.  Printers aren't really a growth business, but there's probably a floor to that business that would allow for a long-term viable business.

Servers seem long-termish to me, too.  So, it's not like she doesn't have a business.  It may just be a manufacturing business, though.
Susan Fourtané
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Susan Fourtané,
User Rank: Blogger
6/1/2014 | 1:05:44 AM
Re: Happy Memorial Day Weekend HPers
Brian, 

Watch here what she said last year about her five-year turnaround plan, and that she initially thought three years. http://www.cnbc.com/id/100980948

She also said there was not going to be a need for extended the window. So, what's next? 

-Susan

 
SachinEE
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SachinEE,
User Rank: Light Sabre
5/31/2014 | 1:59:03 PM
Re : HP Cuts More Jobs
The announcement of cutting the jobs caught me by surprise. The fact that the news was announced earlier than planned was not a big deal. What worried me the most is the number of people that had lost their jobs and the number of families that would suffer as a result of cutting off the jobs. I think that the HP should clearly state the units and areas and the units that will be greatly affected so that the employees in such units can start looking for an alternative.
SachinEE
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SachinEE,
User Rank: Light Sabre
5/31/2014 | 1:54:29 PM
Re: Happy Memorial Day Weekend HPers
It is so sad that people are loosing their jobs especially at this time. People are always looking forward to work on the Hp Company because they pay well and treat their employees well. People should always be given a notice before they are given such news so that they have enough time to prepare themselves for the inevitable. No one should be hearing about them loosing their jobs from the news. They should hear this sensitive news first from their employers.
briandnewby
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briandnewby,
User Rank: Light Sabre
5/31/2014 | 10:13:58 AM
Re: Happy Memorial Day Weekend HPers
Well, Susan, my thought, really, is that if there is ever a five-year plan for a turnaround in anything, it's failed from the beginning.  Directionally, I can sort of see 5 years, but 5 is such a pretty, round, normal number.  I think saying the five-year strategic plan considers a, b, and c, and we hope to achieve these milestones in years 2, 3, and 4 would give me more confidence.

Once she said she had a five-year plan, it seems like it was already game over.
Susan Fourtané
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Susan Fourtané,
User Rank: Blogger
5/31/2014 | 5:55:58 AM
Re: Happy Memorial Day Weekend HPers
Not you, Brian. :D She did promise a five-year turnaround plan.

Originally she had thought of three years, she said in an interview last year. Being those three years due this year she went on cutting more jobs. Doesn't that sound like the plan failed/is failing? 

-Susan
Susan Fourtané
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Susan Fourtané,
User Rank: Blogger
5/31/2014 | 5:41:09 AM
RE: Happy Memorial Day Weekend HPers
DHagar, 

"If, however, she is just cutting because the plan is not working, it will fall into the "Tried That" bucket."

Maybe that's the reason, that the plan was not working. In an interview last year when asked about the five-year plan she said she had said five, but actually had thought three years.

So, those three years were due this year and she went on with cutting jobs, you see? 

-Susan
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
5/29/2014 | 2:15:06 PM
Re: Happy Memorial Day weekend, HPers!
I think Microsoft is still a safe choice. 

The interesting thing about IBM's culture is that it really goes back to the 1940s and 1950s and the emergence of the very first business computers. IBM had a choice of viewing itself as an equipment vendor or a business services vendor and they went with business services. It's why their technicians showed up on-site wearing collared shirts and ties rather than coveralls. Coveralls were OK for the guy installing the phones and electrical wiring and mailroom equipment and such, but IBM was above all that. 

So IBM's pivot from a mainframe supplierto business services consulting 20 years ago really had deep roots.
briandnewby
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briandnewby,
User Rank: Light Sabre
5/29/2014 | 1:00:21 PM
Re: Happy Memorial Day weekend, HPers!
I thought the oddest thing with the recent IBM letdown (other than the fact that I was surprised it didn't happen long ago--I never knew how IBM really pulled off its transformation to a services company) was that in my years in business, the cliche phrase was, "No one ever got fired for picking IBM."

That seems to be something that cannot be said anymore.

I'm not even sure there is a company right now that has that same street cred today--maybe in certain niches, like Google for search, but overall in IT, I can't think of the "safe choice" anymore.
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