HP: Waiting for the axe to fall

Impending job cuts have some experts questioning whether HP's new chief executive can provide the necessary technical leadership to compliment his renowned restructuring talent

Another week, another IT stalwart plans a swathe of job cuts. Following hot on the heels of the 13,000 estimated losses announced by IBM, HP seems poised to chop its headcount by around 10,000 to 15,000 workers, according to reports out on Monday.

The news will come as little surprise to anyone familiar with the struggling tech giant, as comments from the HP's new chief executive Mark Hurd finally seem to confirm what many workers have been expecting long before outgoing chief executive Carly Fiorina was given her marching orders. HP is operating on "a cost structure that is off benchmark in many areas" was Hurd's carefully worded, if not very subtle, way of signposting the imminent arrival of a blizzard of pink slips.

While the precedent set by IBM smacks of a wider industry malaise, HP has some deep-seated issues of its own making to deal with. If an email received by ZDNet UK from an HP employee is representative of a general feeling among the company's workforce then Hurd has got his work cut out, not only correcting the company's fragmented internal structure but also in tackling a severe morale problem.

"Two weeks ago they started chopping off contractors like limbs with gangrene. A few nights ago budget cuts were announced and the word is it will be a "bloodbath". I am [an] HP employee, and we all fearing for our livelihood. The mood at HP is a combination of panicked and stunned," claimed our anonymous source.

While the "things are going to get worse before they get better" strategy may be a necessary one given HP's bloat and lack of focus, the firm's long-suffering workforce won't be keen to hear it. That said, HP employees are much more likely to take the pain of redundancies if it is softened by something that many had been craving throughout Fiorina's reign: technical leadership.

What will make the difference for HP in the long-term, and mark out Hurd as a wise hire by the board? It's not his well-publicised abilities to slash costs and reorganise but whether he actually has a plan to grow the company, specifically its enterprise computing businesses. If Hurd is unable to inject some dynamism into this side of the business and the company as a whole, then customers and revenue may join workers on the list of things that HP will be shedding over the coming months.