Really tired.
HP extends IT gloom forecasts to 2004
As Dell goes for the jugular
By Paul Hales: Thursday 10 October 2002, 16:49
THE BORN AGAIN HP is not pinning its hopes on any upturn in the technology sector before 2004, an executive Veep at the firm said.
Instead, the company is likely to continue to hack and slash its way through its workforce, nicely expanded through its acquisition of Compaq, in order to cut costs.
Michael Winkler, head of global operations at HP said the company could feasibly cut its costs by more than the the $3 billion target set by the mighty Carly Fiorina.
The total number of casualties of the merger stands at around 16,800 humans, and Winkler said he didn’t expect the toll to rise beyond that. "I don't think you'll see a dramatic difference from what has been published today in the head-count side of things," he hold reporters. Instead he thought the savings savings could come in "procurement, logistics and distribution and IT," Reuters reports.
Further job cuts are not ruled out, however.
"I think nobody is counting on a recovery in 2003 now" said Winkler. “Lord knows we'd like to see it happen in the second half of the year," he added, though the firm’s not counting on it.
"Technology buying has not recovered the way people had hoped for, and the survivors are going to be the ones that have very lean cost structures," he said.
The pace setter in the market continues to be Dell, a firm that has weathered the IT squall better than most and which has successfully cut its costs over recent months and years.
Winkler denied (cough!) that HP had taken its lead from the direct seller in setting up a direct sales website for small business customers, instead he reckoned the impetus was more form the likes of Amazon and eBay, firms, indeed that look nothing like HP. He reckoned taking sales orders through the Internet site was $25 to $35 cheaper per order than by phone.
But while Winkler was being downbeat about any recovery any time soon, HP’s real adversary was piling on the pressure by striking a blow at the company’s one significant revenue stream – ink.
Carly’s would-be nemesis Michael Dell yesterday said that price of printer consumables, "can come down quite considerably." An utterance that is likley to have had the mistress of the universe quaking in her hand-stitched boots. |
