SiliconBeat

Has any large American company been so thoroughly transformed in recent years as Hewlett Packard? I started thinking about this when I heard the company planned to lay off 24,600 employees in the wake of closing its purchase of EDS in August. That represents about 7.7 percent of the combined workforce. On average, post acquisition layoffs range from 7 to 10 percent.

Still, the raw number underlying that percentage represents the latest in a series of dramatic moves to reshape this valley icon. First under Carly Fiorina, and now under Mark Hurd, the company is almost unrecognizable from the company that began this century. The most obvious signs of this are the blockbuster acquisitions: Compaq, Mercury Interactive, Opsware, and now EDS.

But underlying those big moves is the enormous upheaval within the ranks of HP and the companies it has acquired. To get a sense of how profound this has been, I went back to look at some of the numbers related to HP’s various restructuring announcements. By my count, including the enhanced retirement plan offered in 2007 and the EDS cuts, HP has gone through seven rounds of restructuring since 2002.

When the latest EDS cuts are completed, a process expected to take at least three years, the company will have announced lay offs of 57,500 since 2002. The total cost of laying off that many people: $9.01 billion dollars, about half of that in cash. I’ll explain how I got that figure in a moment. Read the rest of this entry »

Hewlett-Packard and Electronic Data Services settled five EDS shareholder lawsuits filed in
response to the proposed merger of the two companies, according to a release HP put out Friday announcing approval of the HP-EDS merger by the European Commission.

The lawsuits were brought by shareholders who questioned the deal’s valuation and who urged that EDS put itself up for auction in hopes of attracting a higher bid, something plaintiffs said terms of the deal
prohibited.

As part of the settlement, HP and EDS said that the closing of the merger will not occur prior to Read the rest of this entry »

(photo courtesy Dan Farber via Flickr)

After the tumultuous reign of Carly Fiorina, Mark Hurd was brought in to bring the boring back to Hewlett Packard. And for the most part, he’s succeeded. The stock is up about 50 percent over the past two years. And against the odds, Hewlett Packard has left rival Dell in the dust when it comes to PC sales (though it had some help from Dell’s little accounting problems).

Hurd has done all this by being the un-Carly. No flash. No big headlines. No game-changing moves. Which is what makes the announcement about EDS this week so surprising. Despite the size of the acquisition, Hurd tried to play it down, insisting he and HP were well equipped to handle the integration challenges. In one filing with the Securities and Exchange Commission, the company even posed the question: “HP has said it was not focused on transformative acquisitions.  Is this not transformative?”

HP’s answer:

“This acquisition fills out a part of our portfolio that we consider to be strategically important. This acquisition will strengthen our ability to compete in the important services segment. By using our technology to automate, we will be able to drive greater efficiencies for our customers on a global basis while expanding our offerings in key segments and extending our reach in important vertical industries.” 

But that doesn’t really answer the question.

Read the rest of this entry »