About a year after acquiring Autonomy for $11 billion, HP wrote off $8.8 billion of the acquisition and said it found $5 billion worth of alleged fraud on Autonomy’s books.
Whitman has been visiting the U.K. headquarters of Autonomy this week. During meetings with the press, she explained why she went public with the accusations, the Telegraph reports:
“… because the magnitude of the accounting improprieties, the disclosure failures, the accounting misrepresentation was so substantial that there was not even an option to not be straight up about this. We had to explain to our investors, our employees what had actually happened here,” she said.
Autonomy founder Mike Lynch vehemently denies the allegations. He told Business Insider that HP’s own mismanagement of Autonomy is what really hurt it. Various legal and regulatory bodies in the U.S. and the U.K. are now investigating.
In the meantime, rumours swirled that HP could dump Autonomy or decimate it with layoffs. HP is currently about half-way through a multi-year, 29,000-employee layoff and reportedly got rid of about 70 Autonomy employees in January. It also was looking to hire 50 engineers for the unit.
If Whitman isn’t going to dump Autonomy, she’s got to calm enterprise customers who tend to shy away from drama and allegations of fraud when signing big contracts.
“We remain committed to Autonomy,” she said at a press conference on Wednesday, reports the Wall Street Journal. “It is an almost magical technology…It plays into a big shift in the market, the area of Big Data which HP should be in.”
Whitman has said before that HP won’t sell Autonomy, which makes “big data” technology that can scan large volumes of info, including text, photos, and analyse the content. Autonomy calls this “meaning-based computing.”
Meanwhile, three HP board members were so thoroughly chastised by shareholders at the HP’s annual meeting last month, that two of them resigned and the chairman, Ray Lane, stepped down from the job. He’s staying on as a director.
That set off a new round of speculation that HP could break up, or sell of Autonomy, and this new round of assurances from Whitman.