HP Has 400-Plus Employees Working on Split
Chief Financial Officer Cathie Lesjak said during the conference call that the separation will be "as close as you can get to zero-base budgeting for two Fortune 50 companies, because every line item needs to be reviewed [and] every balance sheet item needs to be reviewed to do this split. It's a huge opportunity for us to really take a different perspective with our cost structure." What this means for employees is unclear. Since Whitman announced a multi-year restructuring effort in 2012, the company has shed more than 41,000 jobs and plans to cut up to 50,000 to 55,000 once the reductions are complete. Whether more workers will lose their jobs after the company breaks in two is unclear. Savings derived by the job cuts already are being reinvested in the company, in such areas as R&D, Lesjak said. The CEO talked about going on the road to meeting with investors and already is speaking with other parties. In the first 18 hours after the announcement, HP officials spoke with more than 38,000 customers and 69,000 partners. "I would have to say that almost universally they are enthusiastic about this," Whitman said. "They think it's going to be good for them and good for their business, because we'll have two more focused companies that have the ability to react faster to the marketplace and meet their customer needs in a more focused way."Whitman said a key to the success of the strategy is ensuring that HP as a single company meets its business targets in the coming fiscal year. "The most important thing we can do to get these two companies off on their own is deliver this year while we execute the separation," she said. "This is a big and complicated separation. It is the biggest separation that's ever been done. It's not a typical spin-off where you've got one big company spinning off a little part of the company."
Some analysts have questioned the wisdom of the move, arguing that what will be created are two weaker companies. In addition, rivals like Dell and Lenovo already are looking to use the distraction and disruption caused by the split to lure away HP PC and data center hardware customers.