Published: 04 Oct 2012
Last Updated: 19 Aug 2013
Whitman’s announcement caps a poor quarter for HP, which posted an $8.8bn (£5.5bn) loss for the last three months. The tech giant in the middle of a massive restructuring in an attempt to cut costs and increase revenues. 27,000 jobs will be axed by 2014, around 8% of HP’s total workforce. Nevertheless, it will be four years before the company will start to see the benefits of the turnaround, admitted Whitman. Only in 2016, she said, will operating profit start ‘growing faster’.
But traders today weren’t interested in the long game. After HP released an update forecasting profits of between $3.40 and $3.60 per share for the current fiscal year, far below analysts' expectations of $4.18, HP’s share price plunged 13%.
It’s a tough time to be flogging computers. And firms like HP and Dell have not reacted fast enough to the fall-off in demand for PCs and the huge spike in demand for tablets and other mobile computing devices. Revenues at HP’s enterprise arm, which used to be the firm's major money spinner, are predicted to fall 11% to 13% this year.
And Whitman herself is not having the best run. The former eBay CEO only replaced predecessor, Leo Apotheker, in September 2011. Apotheker was given the boot after just 11 months: during his tenure, the company slashed its financial outlook three times. Throw in the departure of Mike Lynch, one of Britain’s most successful tech entrepreneurs, and it looks like HP is not waving but drowning. Lynch’s Autonomy was acquired by HP in 2011 but the firm was not performing well under the HP umbrella. He left in May after months of fractious dialogue with his new paymasters.
So what next for HP? Whitman will have to press on with the corporate restructuring, and weather the share price storm in the meanwhile. But given the speedy ousting of Apotheker, this will be a nailbiting time for the HP boss.
But traders today weren’t interested in the long game. After HP released an update forecasting profits of between $3.40 and $3.60 per share for the current fiscal year, far below analysts' expectations of $4.18, HP’s share price plunged 13%.
It’s a tough time to be flogging computers. And firms like HP and Dell have not reacted fast enough to the fall-off in demand for PCs and the huge spike in demand for tablets and other mobile computing devices. Revenues at HP’s enterprise arm, which used to be the firm's major money spinner, are predicted to fall 11% to 13% this year.
And Whitman herself is not having the best run. The former eBay CEO only replaced predecessor, Leo Apotheker, in September 2011. Apotheker was given the boot after just 11 months: during his tenure, the company slashed its financial outlook three times. Throw in the departure of Mike Lynch, one of Britain’s most successful tech entrepreneurs, and it looks like HP is not waving but drowning. Lynch’s Autonomy was acquired by HP in 2011 but the firm was not performing well under the HP umbrella. He left in May after months of fractious dialogue with his new paymasters.
So what next for HP? Whitman will have to press on with the corporate restructuring, and weather the share price storm in the meanwhile. But given the speedy ousting of Apotheker, this will be a nailbiting time for the HP boss.
