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In anticipation of its split into two separate companies, Hewlett Packard Company, as part of its 2015 Securities Analysts Meeting today, outlined plans for the future Hewlett Packard Enterprise Company.
Among its announcements about strategy and financial outlook, the Hewlett Packard Enterprise leadership team disclosed that 25,000 to 30,000 employees will be laid off, primarily in its Enterprise Services business.
The cost-reduction plan is expected to deliver $2.7 billion in ongoing annual savings, according to an HP press release.
“These restructuring activities will enable a more competitive, sustainable cost structure for the new Hewlett Packard Enterprise,” stated Meg Whitman, current HP chairman, president and CEO, who will become president and CEO of Hewlett Packard Enterprise.
“We’ve done a significant amount of work over the past few years to take costs out and simplify processes, and these final actions will eliminate the need for any future corporate restructuring,” Whitman said.
Enterprise Services is currently headquartered in Plano, Texas, and employs more than 135,000 people worldwide.
HP announced in October 2014 that it would separate into two companies: HP Inc. would produce computers and printers, while Hewlett Packard Enterprise would focus on infrastructure, software, services and cloud.
The split “will provide each new company with the independence, focus, financial resources, and flexibility they need to adapt quickly to market and customer dynamics, while generating long-term value for shareholders,” Whitman stated at the time.
The new Hewlett Packard Enterprise will have more than $50 billion in annual revenue and will be focused on delivering integrated technology solutions to a market that has the potential to exceed $1 trillion over the next three years, the press release stated. Hewlett Packard Enterprise will trade under the ticker symbol “HPE.”
“Hewlett Packard Enterprise will be smaller and more focused than HP is today, and we will have a broad and deep portfolio of businesses that will help enterprises transition to the new style of business,” Whitman said Tuesday.
By Palo Alto Weekly staff
By Palo Alto Weekly staff
By Palo Alto Weekly staff
I continue to be impressed with HP and its leadership, especially Ms. Whitman as they have the foresight and fortitude to constantly reinvent themselves in an ever changing market and under stricter government protocol and a more demanding corporate culture.
Yes, laying off 25-30,000 employees to cut costs is brilliant. And while Whitman is no Carly Fiorina, she is impressive nonetheless.
I wish all of the layoff-ees the best of luck. I was laid off from HP 10 years ago and received a decent severance package (when Carly Fiorina was at the helm). Gossip now is that HP’s generosity leaves a lot to be desired. I’d be curious to know what that means, if anyone can share.
The following is from a Business Insider article from August 27 regarding the HP ES business unit. A small number of employees were offered jobs at another consulting firm in lieu of severance.
“HP told employees affected by this arrangement that they are being “terminated” and will not be offered the standard one week of pay for each year of employment, our source told us. HP will pay for unused vacation time only in states that require such payments by law, we were told.”
So it appears that the standard severance package is one week per year of employment.
I blame Carli Fiorina for this mess.
How exactly is this “mess” the fault of Carly Fiorina? The vast majority of the new layoffs will be in Enterprise Services (ES), which was formed when Mark Hurd acquired EDS — long after Fiorina left the company. If anyone is to blame, it’s Hurd for making a poor acquisition, and subsequent leadership for failing to recognize the market shifts that led to this. These cuts should have happened 5+ years ago, but HP’s current issues are hardly Fiorina’s fault. Could it be that you just don’t like her politics?
Carly does not have much credibility in the Valley strictly because of the mess she made w/ HP and then Compaq when she was in charge. The company never fully recovered. Carly’s lack of support in these parts is really NOT based on politics at all. Silicon Valley watched with bulging eye and saw up close how she runs a ship, that’s why many are not fans.
I’m not claiming that Fiorina was either a good or bad CEO. I just don’t think any of HP’s current issues can be directly pinned on her. Mark Hurd gutted the R&D and innovation engines of the company and saddled HP with the boat anchor of the EDS acquisition and the useless acquisition of Palm. And Leo Apotheker embarked on an utterly schizophrenic Software strategy, culminating in the disastrous acquisition of Autonomy.
I know Carly was deeply unpopular (for some valid reasons), but the root causes of the current challenges started well after she departed.
If there’s anyone to blame it would be HP’s board of directors.
After they let Mark Hurd go, they brought in Leo Apotheker in September 2010. Apotheker’s idea was to spin off the personal computing division and focus on software services, much like IBM had done. The board did not like this and they sacked Apotheker with barely ten months of service.
The board then hired Meg Whitman who pretty much ran the business as usual, with little innovation and no strategic direction. Three years later, what did the company decide to do? They decided to split services from hardware.
Since Apotheker’s exit, HP has underperformed the S&P 500 by about 60%. Having Whitman at the helm has not increased shareholder value.
If I were an HPQ shareholder (I am not), I’d be calling for her ouster.
Hiring an outsider as CEO was a fatal mistake. Carly (Style over substance), Hurd (Ellison’s buddy) , Apotheker (where’s Leo?) and now Whitman (trying to clean up the mess). Bill and Dave must be rolling in their graves.
@Susan and @Color me impressed as well
Are your comments serious or sarcasm? As a reader who is not part of the computer/business world I can’t tell what you meant.
Mine was definitely sarcasm.
BTW, if Meg and the BOD have the foresight to reinvent themselves, why didn’t they see this coming? There’s no foresight involved here. It is a reaction, and that reaction is to cut jobs. Anyone can do that…provided they have no empathy for others. And before anyone jumps down my throat, (1) I have had the good fortune to never have been laid off, yet I still empathize with those who have and (2) I have more than one acquaintance who run small companies and took massive hits to their personal wealth during the dot com bust in order to save their employees jobs. No respect for Whitman and the current BOD.