HP's Whitman works to assure customers as company cuts staff

CEO emphasizes a customer-focused direction at HP Discover

REUTERS/Lucy Nicholson

LAS VEGAS - As Meg Whitman, the CEO of HP, took the stage here today, the thousands sitting in this cavernous hall applauded politely and then stilled.

This was Whitman's first appearance at HP Discover, and she faced an audience of people who run systems that help ensure that airplanes fly on time and banking systems never fail.

But Whitman was also standing before an audience of people with concerns. They want to know what changes are in store as HP plans to cut 27,000 people, or about 8% of the company, over the next two years.

As in years past, attendees are at this large user conference to get the latest product information, meet directly with HP engineers and see how their peers are handling the same problems they deal with. But the layoffs and questions about Itanium, the subject of a court fight this week, made the answers they typically seek more pressing.

One IT manager, who didn't want his name used, said HP has about 45 people assigned to his company who provide sales and technical support. Part of his mission at this conference was to find out about the "continuity of the technical support" post-layoff. In the last week, he has learned that as many as 25% of the HP staff assigned to his firm may "turn over," or be affected by the layoff in some way.

That change is unsettling, he said. Aside from the technical support issues, there would be the loss of personal relationships. "Unfortunately, those type of changes continue to happen through our industry and the world," said this manager.

Whitman, who took the CEO job last September after her predecessor Leo Apotheker was shown the exit, used the continuing CEO upheavals to make a point about HP. "The kind of turmoil that HP has had at the top of the company can take a toll on companies, employees, shareholders," said Whitman. "But I've been surprised at the resilience of HP people -- HP is a remarkably resilient company."

HP employees "will do anything to help you in any circumstance," said Whitman.

She picked up that theme again near the end of her talk, using allegory and symbolism to explain how HP is a "truly differentiated" company in a variety of areas, but "most of all we're differentiated by our people who will do anything to deliver for you."

As the wall-to-wall screens displayed a large flock of birds literally darkening the sky, Whitman said "HP will darken the skies with the magnitude of our response."

The company's hardware roadmap issues were also addressed indirectly.

Among the attendees on hand today was Leon Arens, who runs NonStop at a financial service firm. These are fault-tolerant systems designed to never fail. They have their own operating system, the NonStop OS, and run on the embattled Itanium, the subject of the court fight this week with Oracle.

Arens said the coming layoffs are a concern, but HP, the company, seems solid. His main worry is about Itanium. A platform change, if it were to happen, would be at least five years off. But even that time frame would make him "a little nervous."

"There's too much on the Tandem that is mission-critical [and] to jump out of it five years from now would be crazy," said Arens. He was referring to the company that originally developed NonStop before it was acquired by HP with its 1997 Compaq acquisition.

Whitman didn't talk about specific systems or product lines, except to remind the audience that the company's "foundation is infrastructure and that 70% of its revenues come from hardware and infrastructure." She also cited services and software as key differentiators. And in many ways, it was developments in those areas that she emphasized most.

Craig Benson, an IT infrastructure manager at a grocery retail chain, took notes as Whitman spoke. One quote that Benson wrote down was when Whitman said: "Your agenda is our agenda."

"It's something that I'd like to see executed," said Benson. "She did say some good things about HP's philosophy."

Benson said his company has more IT projects than staff. He hopes that Whitman's approach will lead to better implementation services for new products. "I want the whole thing packaged and delivered so our IT staff can focus on other things, not just the task for getting the new widget installed," he said.

Benson said he found out yesterday that the HP sales executive assigned to his company is among those who is being cut. "At this point, I don't have anyone assigned to my account and my company's account," he said.

As a result, Benson said he's trying to find out what HP is doing.

The job of assuring customers that HP service delivery won't be affected by the restructuring falls to people such as Scott Weller, the vice president and general manager technology services support. Weller is responsible for infrastructure support and said he expects most of the attrition will be the result of retirements.

But the changes will also help the company respond to new directions, particularly cloud-based services.

The restructuring, he asserted in an interview, will bring "no change in service levels, and where possible, (HP will) improve them."

Patrick Thibodeau covers cloud computing and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov or subscribe to Patrick's RSS feed. His e-mail address is pthibodeau@computerworld.com.

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Copyright © 2012 IDG Communications, Inc.

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