patrick.net

Or they did both: Flush with cash from low taxes, and no longer needing the employees, they fired the latter and brought their shares back.

Clearly, the only way HP will resume hiring is to cut taxes and deficit spend even MOAR.

Edited in Bold for typo.

Hewlett Packard Fires 55,000 Employees

It's all Obama's fault!!!

thunderlips11 says

Or they did both: Flush with cash from low taxes, and no longer needing the employers, they fired the latter and brought their shares back.

Clearly, the only way HP will resume hiring is to cut taxes and deficit spend even MOAR.

It highlights the best thing about their business is in the past as they have lots of cash and no real use for it as they would rather buy back shares and boost the stock price than invest in people or equipment

smaulgld says

It highlights the best thing about their business is in the past as they have lots of cash and no real use for it as they would rather buy back shares and boost the stock price than invest in people or equipment

They should start a prop trading or private equity group and make money like the rest of us in financial services.

Since HP cannot innovate anymore, they need to diversify out of STEM deliverables and into the world of BS. A firm needs to know when it's past its prime. Since the spin off of Agilent, this firm hasn't done squat. In fact, Agilent was HP's most innovative true STEM dept.

Remember when Rockefeller's Standard Oil was broken into 26 firms? Did the heirs start more oil drilling and energy exploration firms? No, they took their billions and rolled it over into finance (including REITs, Foundations, etc) and made even more money, doing less work.

Rin says

Since HP cannot innovate anymore

That is the key.
Buying back shares only gives the appearance of value for HP.

zzyzzx says

It's all Obama's fault!!!

who else?

Rin says

Since HP cannot innovate anymore, they need to diversify out of STEM deliverables and into the world of BS

In other words, become the next IBM?

sbh says

Give the job creators a break, guys!

MIght be inclined to give job creators a break but HP is firing 55,000 people. What break do they deserve? The low interest rates are a gift to them

sbh says

They're over-taxed, over-regulated, beset by venal unions; their customers' discretionary income is decimated by illegal job thieves; they haven't had a no-bid contract in years; outsourcing/offshoring has been made punishable by death; their senior management can't take any more austerity

What about gold? Didn't Nixon's closure of the gold window, plus the teacher's unions, make it impossible for HP to run a profitable business?

smaulgld says

Rin says

Since HP cannot innovate anymore

That is the key.

Buying back shares only gives the appearance of value for HP.

The thing is that they'd dump Agilent, their most innovative team, and since then, have made one bone headed play after the other.

They'd stopped working on the PA-RISC, their own successful in-house chipset. And back then, they were considered the best unix server company in terms of performance and delivery. Sure, second to Sun in terms of pure sales volume, but still, way ahead of IBM's AIX and other competitors.

After purchasing DEC/Compaq for $24B, they'd ditched the DEC Alpha product line, which was the best 64 bit RISC chip of its time and went with Itanium, basically outsourcing their future to Intel. In other words, they'd spent a fortune, only to get a failing PC business.

And finally, they'd acquired EDS for $13B, basically, a glorified helpdesk. Everyone knows that EDS is not a value added solutions provider, it's a bodyshop.

If HP took the cash they'd wasted during those years and worked with a few of our portfolio manager clients, mixing a blend of our prop trading and fixed annuity trackers, they could have been minting money, doing absolutely nothing. But no, they were under a delusion that they knew how to run a business.

zzyzzx says

Rin says

Since HP cannot innovate anymore, they need to diversify out of STEM deliverables and into the world of BS

In other words, become the next IBM?

HP is IBM on steroids.

In other words, while IBM did support its big iron/mainframe business (still a major part of its reoccurring revenue), it also filed patents for work done at Watson or Almaden labs. A lot of its IP revenue, however, is from royalties and licensing. For the most part, IBM cannot execute on proprietary technologies, only industry generics. Thus, they will never be seen as a Samsung/Microsoft/ATT to the general public, just some big firm which does work with the various corporate backoffices.

In contrast to the above, HP's Agilent was very successful and considered an industry benchmark for instrumentation. They'd ditched them. Then, all the various in-house and successfully implemented RISC servers (HP/DEC) were scrapped for Itanium. Now, at best, they can be a helpdesk, via EDS, because anything higher level, had been canned.

For now, HP is a printer company and hate to say it, but that's as generic as a product can get these days. So the difference between HP and IBM is that HP was successful in new technologies, up until they'd gotten retarded w/ Fiona in charge, whereas IBM was only truly successful in the mainframe business.

Time have changed.
Dynamic folks prefer to start businesses or join startup rather than have a safe boring jobs.
Deprive of talent, is difficult for stalwarts like IBM, HPQ and Dell to re-invent itself.
Michael Dell's advice is prescient: Sell the business and return the cash to shareholders.

hanera says

Deprive of talent, is difficult for stalwarts like IBM, HPQ and Dell to re-invent itself.

I believe that HP did have talent. In fact, some of them were friends and acquaintances.

The problem was a management which couldn't wield that talent into a successful business. Instead, HP's management went out of their way to trash the firm's technical offerings. It's as if these execs had come from a Big Tobacco company where making Paul Mall, as cheap as possible, was the only business model. The problem with that mentality was that they took the 'Race to the Bottom' so seriously, that in the end, they didn't have a high tech firm anymore.

The fall of HP is so staggering, that it boggles the imagination.

hanera says

Time have changed.

Dynamic folks prefer to start businesses or join startup rather than have a safe boring jobs

HP is the Detroit of the tech world

Rin says

For now, HP is a printer company and hate to say it, but that's as generic as a product can get these days. So the difference between HP and IBM is that HP was successful in new technologies, up until they'd gotten retarded w/ Fiona in charge, whereas IBM was only truly successful in the mainframe business.

I guess the 60 billion or so that IBM Global Services rakes in doesn't count as truly successful.

smaulgld says

HP is the Detroit of the tech world

Like much of the rust belt, Detroit's fall was slow and gradual. Starting in the 70s, many of the major Great Lakes cities starting declining.

HP's fall is more like the band Metallica. Between the 80s and 90s, Metallica was one of major leaders of hard rock. In terms of respect, awards, concert, & record sales, they were a top global act, in that hallowed zone with U2, REM, Guns & Roses, Nirvana, etc. Then, just as the 90s closed off, they couldn't make music anymore and started putting out slop, which sounded like copies of other NuMetal bands, as well as their older stuff recycled. Since 2003, Metallica was a loser band and continues to be so, even today.

bob2356 says

I guess the 60 billion or so that IBM Global Services rakes in doesn't count as truly successful.

I'm talking about as a technology firm, not as a place which puts warm bodies on a customer site.

Global Services is a generic consulting arm, which IBM's non-mainframe users use, kinda like an Accenture or PWC. Since IBM is already seeded in the Fortune 1000, thanks historically due to the mainframe, selling additional IT workers to them isn't a big deal.

Rin says

Since 2003, Metallica was a loser band and continues to be so, even today.

Nowhere more evident than on St Anger.
Death Magnetic isn't bad though

smaulgld says

Rin says

Since 2003, Metallica was a loser band and continues to be so, even today.

Nowhere more evident than on St Anger.

Death Magnetic isn't bad though

Between those two CDs, they'd ripped off NuMetal riffs, lifted stuff from their prior classics, and became a complete shadow of their former selves.

I'd like to see HP cut loose Tandem Nonstop to become a independent company.

Well, they've put most of the HP Labs eggs in one basket -- banking on the success of a memristor based computer. If they pull it off, they could win big. HP’s simulations suggest that a server built to The Machine’s blueprint could be six times more powerful than an equivalent conventional design, while using just 1.25 percent of the energy and being around 10 percent the size. That said, there's plenty of competition out there.

EBGuy says

The Machine’s blueprint could be six times more powerful than an equivalent conventional design, while using just 1.25 percent of the energy and being around 10 percent the size.

The problem is not so much HP labs, as it's known that there are smart engineers there. The problem is that the company, as a whole, needs to be able to make the system, test its stability, and finally, actually be able to sell it. If the current HP culture is in the toilet, chances are, they may have to license the technology, to book revenue on the R&D. And that's essentially what IBM does with its R&D centers.

Rin says

If the current HP culture is in the toilet, chances are, they may have to license the technology, to book revenue on the R&D. And that's essentially what IBM does with its R&D centers.

Does any body work there or know anyone who works at HP?

smaulgld says

An unintended consequence of artificially low interest rates-companies choose to use cash or to borrow cash to buy back their own shares

That's it, ZIRP has consequences.

smaulgld says

Rin says

If the current HP culture is in the toilet, chances are, they may have to license the technology, to book revenue on the R&D. And that's essentially what IBM does with its R&D centers.

Does any body work there or know anyone who works at HP?

I used to know up to 15 ppl there at one point in time. I was told through the grapevine that perhaps 1 of that cast/crew is still there. A lot of that had to do with the fact that these folks were associated with the unix/PA-RISC/DEC Alpha servers and so when HP essentially gutted that business, many were let go or had moved on.

Before HP's execs went AWOL, HP was considered the greatest place to work, in terms of training, teamwork, delivery, etc. During various shindigs at the pubs/bars, I was amazed at how loyal those ppl were to their company. The very last social I'd attended, however, it was the opposite. Everyone was looking and I'd gotten a few resumes to forward on.

More HP news, buying Aruba for $2.7B ...

http://www.bloomberg.com/news/articles/2015-03-02/hewlett-packard-agrees-to-buy-aruba-networks-for-2-7-billion?cmpid=yhoo