H-P Chief Sees More Pain Ahead, Trims More Jobs

Discussion in 'Wall St. News' started by ASusilovic, May 20, 2009.

  1. Breaking from other technology chiefs who have recently expressed optimism, Hewlett-Packard Co. Chief Executive Mark Hurd warned he hasn't seen the tech industry emerge from its painful slump.

    Mr. Hurd said in an interview that the spending climate "looks the same" in the current quarter as the preceding quarter, where H-P recorded a 17% profit drop amid sharp declines in sales of its PCs and printers. He later added in a conference call, "I'm not ready to call it better."

    H-P said it will cut an additional 2% of its work force, or more than 6,000 jobs, over the next year. The company was already in the process of cutting more than 24,000 jobs as part of its integration of Electronic Data Systems, a technology-services company it acquired last year.

    Mr. Hurd's remarks tempered the recent optimism generated by executives at other tech companies, including Cisco Systems Inc. and Intel Corp.

    On Tuesday, H-P also posted a 3.2% revenue decline for its fiscal second quarter ended April 30. It was the first year-over-year decline in quarterly revenue for the Palo Alto, Calif., company since Mr. Hurd took over as CEO in 2005.

    While H-P maintained its profit projections for the fiscal year, the company sounded a more cautious note on its revenue. H-P said revenue will likely decline 4% to 5% for the fiscal year, compared with a previous forecast for a 2% to 5% fall.

    That sent H-P's shares down 5% in after-hours trading to $34.75, after the stock closed off 2.4% to $36.58 in 4 p.m. New York Stock Exchange trading.

    Until recently, H-P, the world's largest PC company by revenue, had steadily growing profit and revenue. But it stumbled at the end of last year as corporate tech spending plunged, even as it continued to outpace competitors like Dell Inc. in the PC business.

  2. Hurd's a wiley one...

    He gave himself a 68% raise last year (to $42MM/year), ostensibly because he's doing such a great job running the company, and then immediately cut all the employees salaries by 5% or more and cut 401k contributions from 4% to 0% (from 6% to zero for legacy employees), citing poor performance of the company. This was just a few months ago.

    The old timey robber-baron lives strong in Mark Hurd...

    I worked there for a few years. It was like chinese water torture. Although some of the jobs I had were fun, all the high performers left for companies that pay more money and dont' nickle and dime their employees to death. I too eventually left. What a shite hole full of perpetually worried C players and clueless new college grads.

    But! Hurd knows how to squeeze himself some $ out of it!!