Hewlett-Packard company is set two split into two separate companies by November 1, 2015. Massive company lay-offs are also set to happen.
The company began in Palo Alto, California 76 years ago by William Hewlett and David Packard, and has grown into a massive company since. However, in the past decade, Hewlett-Packard has been losing money due to poor decisions by its past C.E.Os.
Under direction of C.E.O Meg Whitman, the plan to help make HP profitable again includes: split HP company into HP Enterprise and HP Inc., in order to allow HP business to operate more effectively; lay off around 30,000 employees; employ people in lower cost countries to avoid paying high employee wages.
Whitman has been HP’s CEO since the fall of 2011, replacing the former the C.E.O who was responsible for a $5 billion dollar overpayment. Many of the Company’s problems were caused by the previous C.E.Os, including Léo Apotheker who was fired in 2011 for making the acquisition of Autonomy (a british computer company) but over payed $5 billion in the acquisition. Other past C.E.Os have made costly decisions too. To the upset of share holders, CEO Carly Fiorina was fired last decade for acquiring the company Compaq for $25 billion. And afterwards, C.E.O Mark Hurd also stepped down in 2010 for managing the company poorly.
Due to the popularity of mobile devices, consumers and companies are switching away from the larger computing devices that HP provides, and this is causing a slow down in the sales and services, another reason why HP is restructuring.
“To hear Whitman tell it, Hewlett-Packard was ‘in a weak position’ when she started on the job four years ago. She pointed to a bloated workforce, a lack of investing in research and development, missed earnings projections and the disastrous $10 billion acquisition of software company Autonomy has led to years of ongoing litigation.”
Only time will tell how much Hewlett-Packard’s situation will improve.