HP turnaround 'could take five years'
By Melanie Defries Thursday, 07 June 2012
A turnaround of US manufacturer HP could take five years to achieve and could be impacted by the Eurozone crisis, chief executive Meg Whitman has warned.
Speaking at HP’s annual customer event in Las Vegas, Whitman, the former head of eBay, said: "We worry a lot about Europe – whether it’s about the sovereign debt crisis, Greece going out of the euro or the challenges in Spain. We are preparing for a reasonably tough situation in Europe."
HP has a greater reliance on sales in Europe than some of its competitors and is considered to be more susceptible to a downturn.
HP’s sales have declined for three consecutive quarters due to falling demand for desktop computers and services and the increasing popularity of tablet-style devices such as iPads.
Its Q2 results, published last month, revealed a 31% year-on-year drop in adjusted net income to $1.9bn (£1.23bn).
Whitman said the company had been left with little room for manoeuvre due to debts that have arisen from a number of big acquisitions, which include last year’s takeover of software company Autonomy, for which it paid $11bn (£7.1bn).
"We have got to build up the balance sheet," she added.
Whitman hopes to reverse a slump in sales and the company’s share-price by cutting around 27,000 jobs and slashing debt.
The company has unveiled plans to trim its global workforce by 8% between now and 2014 largely through early retirement offers and attrition.
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