Short sighted cost savings

"The lack of money is the root of all evil."
                                                    ~Mark Twain
I wrote this quite a long time ago.
I discovered it in my DRAFT folder.
I'm going to guess it was five years ago.


So the big not so big news is that Hewlett Packard (HP) laid off a bunch more people.  It has had a cloud over its head been leaking money for such a long time, most people aren't all that shocked.  Especially, those that had worked for the company during its good times, stayed loyal during its rocky times, fell victim to restructuring after restructuring and finally leaving out of exasperation or let go.

 The following excerpt was pulled from my Google search as the first to share the news:  Pacific Coast Business Times.   

Hewlett-Packard is laying off 25,000 to 30,000 employees globally as part of a restructuring program that will save the company $2.7 billion per year.
HP announced the layoffs on Sept. 15 at a meeting of its securities analysts. The cuts represent about 10 percent of HP’s workforce of about 302,000. It wasn’t immediately clear how the restructuring would affect HP’s office in Goleta.
In September of 2014, HP bought Goleta-based Eucalyptus, which focuses on developing open source cloud technology that interacts with commercial systems from Amazon and others.
Terms of the sale were not announced at the time, but Bloomberg estimated it was around $100 million. The company now operates as HP Eucalyptus.
The timing of the sale last year was odd, given that HP was creating a massive restructuring plan. HP announced plans to lay off 55,000 people in April, which saved the company about $2 billion. Of those, about 54,000 people have been laid off so far in North America.
An HP spokesman said the cuts will eliminate the need for any further restructuring, but declined to comment further.

It is a sad story indeed.  Once the goliath of technology and innovation, it may be more remembered as how bad things can happen to great companies.
"Do not hold the delusion that your advancement is accomplished by crushing others."

Cicero
As a close observer, one couldn't help but notice:

 1.  It had lost its identity.  HP, in my opinion, forgot what the magic was:  the mainstay being printers hosted at most desktops, whether personal or business multifunctional.  
2.  Its evolving leadership 

 According to Forbes, this is how they  place the largest companies in the world:
#12AppleUnited States$199.4 B$44.5 B$261.9 B$741.8 B


#18Samsung ElectronicsSouth Korea$195.9 B$21.9 B$209.6 B$199.4 B
25MicrosoftUnited States$93.3 B$20.7 B$174.8 B$340.8 B

#27AT&TUnited States$132.4 B$6.2 B$292.8 B$173 B
#39GoogleUnited States$66 B$13.7 B$131.1 B$367.6 B
#44IBMUnited States$93.4 B$12 B$117.5 B$160.2 B

#76Cisco SystemsUnited States$48.1 B$8.7 B$104.9 B$139 B

#88OracleUnited States$38.8 B$10.8 B$98.8 B$187.6 B

#96Hewlett-PackardUnited States$109.8 B$5 B$100.9 B$57.9 B

To truly understand how the technology world has evolved, I selected the following companies to examine:

 Alibaba
Amazon
Apple
AT&T
Cisco
Facebook
Google
Hewlett Packard
IBM
Microsoft
Oracle
Samsung











Now if you think, well, 1995 was an ideal time — the start of the dot-com boom — think again. The world at present is a cakewalk compared to 1995.  There were only two  CEOs in my selected list included in a Top CEOs from 1995:

5. Robert Allen, AT&T

7. Louis Gerstner Jr., IBM

  • 1995 - IBM might not be in a position to attempt its latest turnaround were it not for Gerstner's efforts at the helm of Big Blue. Gerstner took over as CEO in 1993, with IBM's mainframe business in shambles, but the CEO cut costs (and thousands of jobs) and transformed IBM by shifting its focus to software and services. IBM’s market value improved from $29 billion to $168 billion under Gerstner’s watch.

 IBM  IBM 1.09%  had fallen just outside the top 10,

 Best companies to work for in 2015 according to Fortune:

1. Google
7. Microsoft
15. Cisco

Five years ago, the best companies in 2010, according to Forbes, were:

13AT&TUnited StatesTelecommunications Services123.0212.54268.75147.55

33IBMUnited StatesSoftware & Services95.7613.43109.02167.01
35Hewlett-PackardUnited StatesTechnology Hardware & Equip116.928.13113.62121.33
49MicrosoftUnited StatesSoftware & Services58.6916.2682.10254.52

55Samsung ElectronicsSouth KoreaSemiconductors97.284.4383.3094.48

75AppleUnited StatesTechnology Hardware & Equip46.719.3653.93189.51
75Cisco SystemsUnited StatesTechnology Hardware & Equip35.536.0776.40140.85

AT&T

 1995 - Allen endured a stormy tenure atop AT&T. In 1995, the company was still smarting from Allen's ill-advised decision to buy computer company NCR, costing AT&T billions. In 1996, Allen took heat for cutting 40,000 jobs while defending his own pay raise.

 Hewlett Packard (HP)

 To allow a better picture, let's take a look at the big picture (Source: Wikipedia)


FoundedJanuary 1, 1939; 76 years ago
FounderWilliam Redington Hewlett,Dave Packard
  • Co-founder: David Packard (President: 1947; Chairman: 1964–1969; Chairman 1971–1993)
  • Co-founder: William Hewlett (Vice President: 1947; Executive Vice President: 1957; President: 1964; CEO: 1969; Chairman of the Executive Committee 1978; Vice Chairman 1983–1987)
  • CEO: John A. Young (1978–October 31, 1992)
  • CEO: Lewis Platt (November 1, 1992–July 18, 1999; Chairman 1993–July 18, 1999)
  • Chairman: Richard Hackborn (January, 2000–September 22, 2000; Lead Independent Director September 22, 2006–)
  • CEO: Carly Fiorina (July 19, 1999–February 9, 2005; Chairwoman September 22, 2000–February 9, 2005)
  • President: Michael Capellas[1] (May 3, 2002 to November 12, 2002)
  • Interim CEO: Robert Wayman (February 9, 2005–March 28, 2005)
  • Chairwoman: Patricia C. Dunn (February 9, 2005–September 22, 2006).
  • President and CEO: Mark Hurd (CEO: April 1, 2005–August 6, 2010; Chairman: September 22, 2006–August 6, 2010)
  • Interim CEO: Cathie Lesjak (August 6, 2010–September 30, 2010)
  • President and CEO: Léo Apotheker (September 30, 2010–September 22, 2011)
  • Executive Chairman: Raymond J. Lane (September 22, 2011–April 4, 2013[2])
  • Nonexecutive Chairman: Ralph V. Whitworth (April 4, 2013–July 16, 2014)[3])
  • Current: Chairman, President and CEO: Meg Whitman (President and CEO: September 22, 2011–present ; Chairman: July 18, 2014–present)

For information's sake, take the other big technology giants, let's compare the leadership evolution of other greats (Source: The Next Web Aug 2011)

Decrease US$ 7.185 billion (2014)[1]
Decrease US$ 5.013 billion (2014)[1]
Total assetsDecrease US$ 103.206 billion (2014)[1]
Total equityDecrease US$ 26.731 billion (2014)[1]
Number of employees
302,000 (Q2, 2015)[1]


AMAZON


FoundedJuly 5, 1994; 21 years ago
Seattle, Washington, U.S.
HeadquartersSeattle, Washington, U.S.[1][2][3]
Area servedWorldwide
Founder(s)Jeff Bezos
Key peopleJeff Bezos
(Chairman, President and CEO)

ServicesOnline shopping, Web hosting,Content Distribution
RevenueIncrease US$ 88.988 billion (2014)[7]
Operating incomeDecrease US$ 178 million (2014)[7]
Net incomeDecrease US$ -241 million (2014)[7]
Total assetsIncrease US$ 54.505 billion (2014)[7]
Total equityIncrease US$ 10.741 billion (2014)[7]
Employees222,400 (October 2015)[8]

Alexa rankIncrease 6 (August 2015)[10]

Bounce Rate

30.20% 6.00%

Daily Pageviews per Visitor

9.46 8.40%

Daily Time on Site


6:44 15.00%

APPLE

FoundedApril 1, 1976, in Cupertino,California, U.S.
Founders
Tim Cook becomes Apple’s sixth chief operating officer in the company’s twenty-forth year. Steve Jobs may have held his position for nearly fifteen of those years but the Cupertino-based company has seen former PepsiCo and Intel executives take the helm – and here they are.

1977 to 1981 – Michael Scott

Michael Scott came to Apple from National Semiconductor after being persuaded by Apple’s third employee Mike Markkula (more on him later) to take the position as the company’s first CEO as both Steve Jobs and Steve Woziak were seen to be too inexperienced for the role.
Scott was reportedly behind a ban on typewriters at Apple, fired 40Apple employees and is quoted as saying (shortly after firing half theApple II team):
“I used to say that when being CEO at Apple wasn’t fun anymore, I’d quit. But now I’ve changed my mind — when it isn’t fun any more, I’ll fire people until it’s fun again.”

1981 to 1983 – Mike Markkula

Mike Markkula became an investor in Apple – providing it with $250,000 ($80,000 as an equity investment in the company and $170,000 as a loan) – also becoming its third employee in 1977.
As CEO, he helped to market the first two Apple computers, providing the company with credit and venture capital. He originally said that he would remain at Apple for four years but stayed longer, serving as chairman from 1985 until 1997, when a new board was formed after Jobs returned to the company.
Apple co-founder Steve Wozniak reportedly credits Markkula for the success of Apple more than himself, despite the fact Wozniak single-handedly built the company’s first two computers.
In 1985 Markkula took sided with other Apple execs to have Steve Jobs ousted from the company.

1983 to 1993 – John Sculley

A former PepsiCo CEO, John Sculley was brought to Apple to use his marketing skills to help the company sell computers.
Sculley is well-known for his disagreements with Steve Jobs, who in 1985 began to lose control of his teams, leading Sculley and other top executives to strip him of all operational responsibilities.
However his strategy as CEO saw Apple incur in high engineering, manufacturing, and marketing costs, with its products causing market confusion. He led the company to utilise PowerPC chips, later admitting he should have gone with the more popular Intel processors at the time.
unfortunately for Sculley, Condé Nast Portfolio ranked Sculley as the 14th worst American CEO of all time.

1993 to 1996 – Michael Spindler

Nicknamed “The Diesel”, Michael Spindler worked his way up through the ranks in Apple’s European operations, becoming Apple Europe’s President, replacing John Sculley as CEO in 1993.
Spindler is credited with the failure of the Newton and the Copland operating system, but also reported to have led takeover discussions with IBM, Sun and Philips, before his replacement in 1996.

1996 to 1997 – Gil Amelio

Gil Amelio was the CEO of National Semiconductor before joining Apple in 1996, despite already being on the company’s Board of Directors.
Amelio helped to overturn the company’s low quality products and introduced Mac OS 8, buying Steve Jobs’ NeXT for $429 million. Within a year, Apple’s stock slumped to a 12 year low, leading to Amelio losing his job, after Steve Jobs convinced directors to cut the CEO.

1997 to 2011 (with exceptions) – Steve Jobs

Named as the interim CEO of Apple in 1997, Jobs’ main aim was to make the company profitable again. He cut numerous projects, leading staff to fear being in an isolated location with him for fear of being fired.
The new CEO helped create Mac OS X, introducing the iMac and other new products before he took the official position as CEO in 2000.
Jobs was behind the iPod, the release of the iTunes music service and the iPhone. Not satisfied with innovating the mobile phone, Jobs helped create the iPad tablet and began making the Mac brand of computers sleeker, sexier and smaller.
Jobs announced his retirement on August 24 2011, stating that he believed he was unable to fulfil the role that was expected of him.

2011 – Present : Tim Cook

Taking over from Steve Jobs as of today, Tim Cook is known for being a calm, collected and quiet man, quite unlike the very animated style of his predecessor. Although his work style is fairly intensive to the point that he is often described as a “workaholic”.
This is not the first time that Cook has served as Apple CEO, having stepped into the breach during recent times that Steve Jobs has taken medical leave.
  • In 2004 Cook deputised for two months while Jobs recovered from pancreatic cancer surgery
  • In 2009 Cook picked up the company reigns for several months while Jobs underwent a liver transplant
  • And January this year, Cook filled in for Jobs after he was granted medical leave by the Appleboard

RevenueIncrease US$ 233.715 billion (2015)[3]
Increase US$ 71.230 billion (2015)[3]
Increase US$ 53.394 billion (2015)[3]
Total assetsIncrease US$ 290.479 billion (2015)[3]
Total equityIncrease US$ 119.355 billion (2015)[3]
Number of employees
115,000 (as of July 2015)[4]



Microsoft




RevenueIncrease US$ 93.58 billion (2015)[2]
Decrease US$ 18.16 billion (2015)[2]
Decrease US$ 12.19 billion (2015)[2]
Total assetsIncrease US$ 176.22 billion (2015)[2]
Total equityDecrease US$ 80.08 billion (2015)[2]
Number of employees
118,584 (March 2015)[3]


I wish HP nothing but the best. I think HP is an icon. Those of us who had their careers in the Valley think of Dave Packard and Bill Hewlett as role models. We would love to be half as good as they were.
Larry Ellison

Read more at http://www.brainyquote.com/search_results.html#u88IcjSMeGlXCWS2.99

 Bill Hewlett and I were brought up in the Depression. We weren't interested in the idea of making any money. Our idea was if you couldn't find a job, you'd make one for yourself.
David Packard


 So, what are your thoughts on what is going on at HP? I've got a blog started on this a couple of weeks ago, but I found myself stumbling a bit writing. It is so sad to see such a great company stifle itself by its own size and self-importance, disregarding the years of some of its so many dedicated employees, asked to accept changes by the minute or hour, instead of the day, week, month or year. In PM for ADS, I'd say 80% (conservatively) have left. Another poor example of offshoring jobs to people that culturally don't understand what it means to be in a fraternity of brothers and sisters who love what the company stands for and what outsiders opinions matter.  I'm seeing it live again with my current organization. Sadly, it isn't something that anyone within a political correct context can express. Gently move that issue aside, and people would be accused of intolerance, bias and racial judgement. Maybe, I'll eventually become a decent writer when I get the courage to speak about what needs to be said but most are too afraid to say. Unless you are on CNN eh?


He that is of the opinion money will do everything may well be suspected of doing everything for money.
Benjamin Franklin

Read more at http://www.brainyquote.com/search_results.html#WVHGsu7HheJ4Lafg.99

 I simply am not surprised. Having experienced HP's brutal management style it's easy to believe that this type of behavior goes all the way to the top. For every great manager, there are a dozen abrasive assholes who manage by insults. Bigger is never better. I can't think of one example where bigger is better for the shareholder, consumer and employees,simultaneously.So HP is no different. For some reason they felt they could grow into a power house and get respect in the industry. They just became a enormous non player. But that isn't a surprise either. Sure, I have compassion for some of the good employees there. But lets face it. It wasn't a very collaborative environment and most people didn't have the balls to stand up to all the bull shit decisions being made on a daily basis. I have never worked for such a combative company in my life - I really don't have anything good to say about the company at all. But I am an out-of-the-box solutions provider - I was never going to fit in. And you are the same - you're a creative mind who always challenges the status quo - you seek better all the time. So you weren't a good fit either. Sorry. 

 So nice to hear back from you Ken! It warms my heart that you have gone above and beyond with a great job. Ironic how when we both started out together in those first few days together, drawn to the same conclusion that there was a dark cloud over HP when we were so smitten and proud to have been chosen to work there. Call it sixth sense or just smarts, we both could tell all was not well in HP. My clue was being changed managers three times at least before we both reported under Storta, while you watched me moved around, like trying to follow the hockey puck on a televised game eh? It would be easy to just blame Daniel or John as his henchman, but it was merely a dysfunction within a greater dysfunctional organization. I should have paid closer attention to Donna when she was honestly saying how differently Canadians do things, eventually it was my downfall because Storta had no idea how different things were and should have impacted the metrics. I'm not bitter, more reflective. I don't go out of my way to read up on HP, it happened to fall on my radar. Admittedly, I cast my web wide to grab what is happening in the world, not just in business. At the same time, I read about Netflix's paternity leave program for fathers which was revolutionary. Honestly, I try to share interesting things on social media to continue to build my online reputation .... eventually it will surmount into something worthwhile. Until then, if it stays that way I don't mind, it is a nice hobby that fills my thirst for knowledge. If you don't mind, I may pull what you wrote in a blog if I do get around to writing it ... it would be anonymous without any reference by name. I'm still debating whether I'll use the actual name. That has been my usual practice, not naming names but hints biggest enough that those inquisitive enough or in the know, will recognize who I am talking about.

  HP is turning into a disaster. It's too bad, they are destroying that company. Glad I left although I really miss telecommuting, I just couldn't handle the environment any more. Take care!
They were just following orders, as we all were I guess. Water under the bridge now. Nice to hear from you!
Off shoring is the way that all the big providers are surviving - where expertise and money is being sent off shore and on shore personal are loosing their jobs. All companies to gain value in the stock market have to show grow, and growing by acquisition filled the greed of the stock market for a while. Hp has been off shoring for years, their huge complexes in California are shells as manufacturing was move off shore years ago..

Top leaders in 2014:

 1. Zuckerberg, Facebook
2. Tim Cook, Apple
3. Jack Ma, Allibaba
The five most valuable tech companies over the past 20 years:
In 1995, the internet was just about to get started. It was only a year after big internet companieslike Yahoo and Netscape were founded.
Fast forward 20 years later, and the web tech business landscape looks a lot different from back then.

In fact, only 1 out of the 5 most valuable public internet companies from 1995 are still in the top 5 list,

#5 in 2015: Amazon

Mike Segar/REUTERS
Market cap in 1995:  Launched in 1995, didn't IPO until 1997
Market cap in 2015: $199 billion
What it does: Amazon is arguably thelargest e-commerce site with over $88 billion in sales last year. It started out as an online book store, but it now sells everything from home appliances and baby products to clothing and gourmet food. Amazon Web Services, its cloud service business, is also generating almost $5 billion in sales.


#4 in 2015: Facebook

Market cap in 1995: Didn’t exist
Market cap in 2015: $226 billion

What it does: Facebook, founded in 2004, is the world’s largest social media site. It has 1.44 billion monthly active users and had over $12 billion in sales last year. It also owns the messaging app WhatsApp and the photo sharing app Instagram. Its 2012 IPO, which valued the company at $104 billion, was the largest internet IPO in history at the time.

#3 in 2015: Alibaba


#3 in 2015: Alibaba
REUTERS/Ruben Sprich
Market cap in 1995: Didn’t exist
Market cap in 2015: $233 billion
What it does: Alibaba is a Chinese e-commerce company that provides many other services like online payments and cloud computing as well. Founded by Jack Ma in 1999, it grew exponentially over the past decade and listed on the NYSE last year. Its IPO, which raised $25 billion, ranks as the world’s biggest in history.

#2 in 1995: Apple


Michael Seto/Business Insider
Market cap in 1995: $3.9 billion
Market cap in 2015: $763 billion
What it does: Apple in 1995 was led by John Sculley, the former Pepsi CEO who’s best-known for ousting Steve Jobs. Regardless of his legacy, Sculley still managed to keep Apple as one of the most highly-valued internet companies back then, hovering around $3.9 billion in market cap, according to Meeker. Two years later, however, Jobs returned as interim CEO and the rest is history.

#1 in 2015: Apple

REUTERS/Kimberly White
Market cap in 1995: $3.9 billion
Market cap in 2015: $763 billion

What it does: Soon after Steve Jobs returned to Apple in 1997, the company took off as one of the most innovative and powerful tech companies in the world. The iPod changed the way music is consumed and the iPhone changed the way we communicate. Even after Jobs died in 2011, Apple has been able to continue to innovate and keep up its value, creating new iPhone products, and most lately, the Apple Watch. In January 2015, Apple had the most profitable quarter for any company during any quarter in history, recording $18 billion in net profit.

#2 in 2015: Google

Ralph Orlowski/Getty Images
Market cap in 1995: Didn’t exist
Market cap in 2015: $373 billion
What it does: Google was cofounded by two Stanford Ph.D students, Larry Page and Sergey Brin, in 1998. Its search engine soon became a massive hit, bringing in billions of people on to its platform. Last year, it generated over $66 billion in sales, mostly through online advertising. But Google’s business isn’t just limited to search and advertising: it sells storage and servers, as well as business software. It’s also engaged in a lot of “moonshot” projects, including driverless cars and internet service balloons.

#1 in 1995: Netscape

Market cap in 1995: $5.4 billion
Market cap in 2015: Doesn’t exist
What it does: Netscape was once the most widely used web browsers in the world, accounting for over 90% of the market in the mid-90s. It went public in 1995, one year after its founding, and according to Meeker, was the most valuable internet company that year. But Microsoft Explorer soon caught on and took over as the de facto dominant web browser. In 1999, AOL acquired Netscape for $4.2 billion, but by the mid-2000s, it pretty much disappeared from the market, although its core technology lives on within the open-source Mozilla Foundation and its Firefox browser. Marc Andreessen, one of the cofounders of Netscape, is now running Andreessen Horowitz, one of the most powerful VC firms in the world.

My site optioneerJM

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