HPs CEO on Split Workforce Reshaping Efficiency Is Watchword

HP's CEO on Split, Workforce Reshaping: Efficiency Is Watchword

Regarding layoffs, HP CEO Meg Whitman says, "I think for 2015, in terms of this restructuring, we are done," but adds, "When you split companies apart, often there is a realignment of the workforce. ... We'll see how it goes."

Hewlett-Packard's (IW 500/9) (HPQ) announcement yesterday that it is cleaving itself in two and laying off 5,000 workers in addition to the 50,000 previously announced raises myriad questions from all over the business map.

One key question is: What will the workforces of the two resulting companies look like? And that query inevitably comes coupled with an anxious corollary: Are even more layoffs coming?

Hewlett-Packard CEO Meg Whitman is playing those cards close to her vest. But if you watch her interview yesterday with CNBC, the answers appear to be: We're still figuring out what those respective workforces will look like; and yes, at some point there will be more layoffs.

Whitman notes that HP's ongoing three-year workforce "reshaping" has been part of a larger restructuring that has included process redesigns and investments in IT systems and research and development, and that HP is "now seeing the results of those IT investments and that business process re-engineering—and there is even more opportunity for efficiency."

A Hard Lean Toward Lean

Whitman implies, however, that additional layoffs won't happen until after the HP split is completed at the end of 2015.

"I think for 2015, in terms of this restructuring, we are done," she says. "Now, when you split companies apart … often there is, again, a realignment of the workforce. But we'll see how it goes. We're going to take each business, now, and say, knowing what we know now, what's the cost structure we need, how do we want to go to market, how do we leverage the supply chain between the two?"

"We're a lot more efficient than we were three years ago. But we have to set these companies up to win. That is our mission."

Efficiency, Whitman says, is a "watchword for companies today."

"We live in a very competitive market," she says. "We have to have the leanest, most effective organization that we can have. So when we see opportunities, we obviously need to take advantage of them. It makes us stronger, and it makes us a more competitive company."

Or two.


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