HP CEO Meg Whitman says that by the end of this year, or maybe the beginning of next, the company’s decline in sales will reverse itself.That’s one of the milestones she says HP will hit in her five-year plan to turn HP around.
The first year has not been good. HP has announced massive layoffs, a pair of $8 billion writeoffs on the company’s two biggest acquisitions, and accusations of fraudulent accounting. The company’s battered shares are trading at about half what they were before Whitman took office.
But that was all part of the plan, she hinted in an interview with Wall Street Journal’s Alan Murray.
Here’s a partial transcript:
Alan Murray: How much patience are you going to need from investors? When do you get out of the hole?
Meg Whitman: I was very clear about the turnaround. One of the things that I think is so important, and that I learned on the governor’s campaign, which is transparency of communication. Say what you mean. Mean what you say and deliver along the lines that you say you will deliver.
So we laid out a turnaround that last year we characterises as figure out what was wrong — really wrong and lay out a foundation to turn it. This year is fix and rebuild, introducing, as I said, whether it be our mid-tier 3Par storage, or our networking product or our new devices that will access this whole new style of IT. And then you’ll start to see the sales trajectory turn at the end of this year, beginning of next.
But I said to get HP running the way I want it to be running, I said this is a five-year turn. There will be milestones along the way along the way.
Despite all the drama surrounding HP’s litany of bad news, the real problem is the declining state of the company’s business. In its most recent quarter, revenue was down 5% to 14% year over year in each business unit.
And there don’t seem to be any amazing new products or services in the wings that could pull the company out of this nosedive.
But the ship will stop sinking by year’s end, Whitman has now promised.