Analysis: Take HP's slide personally, CEO Whitman tells employees

Tue Oct 8, 2013 7:27pm EDT
 
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By Poornima Gupta

SAN FRANCISCO (Reuters) - When Hewlett-Packard Co was removed from the Dow Jones Industrial Average a month ago, Chief Executive Officer Meg Whitman sent an impassioned email to the company's 300,000-plus employees.

"I hope that every HP employee took today's announcement personally," she said in the one-page internal memo on September 10.

Calling HP's departure from the benchmark index it joined in 1997 a "blow to our brand," Whitman said the moved showed many people still harbored doubts about her turnaround plan.

"We need to make every sale," she stressed in the memo, which was seen by Reuters.

Whitman's urgency is easy to understand. Two years into what she has always described as a five-year effort, HP's sales and profits are still sliding and Wall Street is losing patience. The stock has fallen 17 percent in the past three months and is down more than half its value since 2010.

The CEO has sidelined senior executives including PC chief Todd Bradley and enterprise chief Dave Donatelli. Strong new leaders have yet to emerge from the ranks, analysts say.

Though Whitman has vowed to jumpstart innovation, HP Labs - the division that came up with pocket calculators and light-emitting diodes - has been slashed in half over the past two years, part of a company-wide effort to cut costs.

At HP's analyst day on Wednesday, Whitman will give Wall Street an updated picture of 2014. She has already said the company will not grow next year as she once predicted.   Continued...

 
Meg Whitman, chief executive officer and president of Hewlett-Packard, speaks during the grand opening of the company's Executive Briefing Center in Palo Alto, California January 16, 2013. REUTERS/Stephen Lam