Hewlett Packard announced the company would lay off nearly nine percent of its 300,000 person workforce over the next two years, or about 27,000 people. The move is expected to save HP $3 billion to $3.5 billion annually. HP stock went up 5% in response to the news Thursday morning. Research firm Ovum asks “…the key missing piece is [Whitman’s] long-term company vision and strategy, which hopefully will be revealed to an anxious customer base soon… the question still remains: Just what kind of company does HP want to be next year, three years, five years from now?”
HP’s got it backwards. Normally you announce the strategy, then you announce layoffs that fit the strategy.
This approach only buys them time. It doesn’t show much intelligence and it certainly does not inspire confidence that they know what they’re doing.
Don’t bet on a comeback any time soon.
“Can Layoffs Save Hewlett Packard?”
It was a great strategy for Sun Microsystems.
I think that their plan is what a few of my colleagues are calling, ‘Doing a Nokia’.
Basically making themselves avaialable for takeover.
Nokia are doing so badly that their share price has dropped so far that they are getting to the point where they are attractive to the Private Equity Vultures let alone their ‘new’ friend from Redmond.
My guess is that the HP CEO has seen the total mess the company is in and realised that the only way she can get out of it with some credibility is to get the company taken over by some PE Vulture who will do the real dirty work and strip it bare and flog off all those totally incompaible bits that her predecessors have bought.
A new lean and mean and very agile HP may well emerge but I think the next 2-3 years for HP is going to be messy.
As a ex HP (well Compaq) employee, I feel rather sorry for those how are at the coal face in HP at the moment.