It shouldn't be a surprise. New CEO. New vision. Massive layoffs. HP CEO Meg Whitman on Wednesday began making her mark on the company with an outline for a multiyear "productivity initiative" designed to simplify business processes, advance innovation and deliver better results for shareholders.
Whitman expects her plan to save Hewlett-Packard $3 billion to $3.5 billion by 2014, the majority of which will be reinvested back into the company. HP is targeting three areas of strategic focus for its reinvestment: cloud, big data and security.
"These initiatives build upon our recent organizational realignment, and will further streamline our operations, improve our processes, and remove complexity from our business," Whitman said. "While some of these actions are difficult because they involve the loss of jobs, they are necessary to improve execution and to fund the long-term health of the company.
"We are setting HP on a path to extend our global leadership and deliver the greatest value to customers and shareholders."
A Whitman Misstep?
Whitman mentioned job losses. HP plans to slash 27,000 jobs as part of its restructuring. As of Oct. 31, 2011, that represents 8 percent of the company's workforce. Those layoffs will occur between now and the end of 2014.
We touched base with Rob Enderle, principal analyst at the Enderle Group, to discuss the layoffs and his views on whether it's enough to right the HP ship. He told us it's not unusual for a new CEO to order a major downsizing.
"The rule of thumb is to not only make layoffs big and early in your term, but also to make it fast," Enderle said. "You don't want people worried about their job for any extended period of time and you don't want them to leave. If they do know they are going to be laid off, that can...
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