Tuesday, September 29, 2015

HP's Big Split

In 2012, Meg Whitman took control of Hewlett Packard as the company’s Chief Executive. Since then, she has vowed to take the company, “from turnaround mode to growth mode.” As part of her turnaround process, Ms. Whitman has decided to split the company into more specific corporations and fire about 30,000 employees, or 10% of the company by 2018. The split breaks the tech giant into HP Enterprise and HP Inc. and both will market separate types of products and services. HP Enterprise will be led by Ms. Whitman as the chief executive and it will focus mainly on servers, data storage, software, and tech services for companies. The other half, HP Inc., will take over the consumer product side of the business, like printers and personal computers.
            Meg Whitman has made a good move to separate the company. Before the split, HP was too broad and so they were catering to too many markets under one name. Since HP has so many products and has been around for so long, many people only think of their old functions and not their new enterprise services. Furthermore, since there are so many diverse things that the original HP had to market that the marketing team was probably stretched too thin. Now, each company’s marketing team can more specifically focus on their respective product or service market.
            It’s also important to note the negative parts of the company’s reformation, mainly the layoffs. It truly is unfortunate news to hear that thousands of HP’s employees will be out of work, relying on federal unemployment and this will only make our nation’s poor unemployment statistics, even worse. This seems to be Meg Whitman’s most prevalent business move. Since she took the company over in 2012, Whitman has fired over 54,000 employees.
            Most of these job cuts will be coming from HP Enterprise in the call and service centers located in developed countries. The company has decided to replace these people will automated services and outsourcing to Costa Rica and India, like the rest of the world’s major service companies. HP Enterprise is taking the bigger hit in the division because the old enterprise division of the company was much less successful than the old HP personal computer division. In 2014, HP lost many of their big enterprise service accounts, causing them to have an unsuccessful year.

            The article used for this blog could have been better. The author needed to add more statistics about the company’s past success or failure in specific markets like enterprise services and personal computers. Also, it would be interesting to know what, “developed countries” as the article plainly states, HP currently operates out of and why exactly (other than cheaper labor), this is a smart move.


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