Hewlett-Packard: Difference between revisions

On November 1, 2015, Hewlett-Packard was split into two separate companies. Its enterprise products and services business were spun-off to form [[Hewlett Packard Enterprise]], while its personal computer and printer businesses became [[HP Inc.]]<ref>{{Cite news|last1=Mukherjee|first1=Supantha|last2=Chan|first2=Edwin|date=October 6, 2014|title=Hewlett-Packard to split into two public companies, lay off 5,000|website=[[Reuters]]|url=https://www.reuters.com/article/us-hp-restructuring-idUSKCN0HV0U720141006|access-date=October 7, 2020}}</ref>

HP's stock dropped by about a further 40% after the company abruptly announced a number of decisions: to discontinue its webOS device business (mobile phones and tablet computers), the intent to sell its [[personal computer]] division (at the time HP was the largest personal computer manufacturer in the world), and to acquire British [[big data]] software firm [[Autonomy Corporation|Autonomy]] for a 79% [[control premium|premium]], seen externally as an "absurdly high" price<ref name="bloomberg29nov2012" /> for a business with known concerns over its accounts.<ref>{{cite web |title=HPQ stock since naming Leo Apotheker CEO. |url=http://investing.money.msn.com/investments/equity-charts?symbol=US%3aHPQ |website=MSN Money |access-date=August 30, 2014 |archive-url=https://web.archive.org/web/20140728102337/http://investing.money.msn.com/investments/equity-charts?symbol=US%3aHPQ |archive-date=July 28, 2014 |url-status=dead}}</ref> Media analysts described HP's actions as a "botched strategy shift" and a "chaotic" attempt to rapidly [[Turnaround management|reposition]] HP and enhance earnings.<ref name="bloomberg29nov2012">{{cite web |url=http://www.businessweek.com/articles/2012-11-29/why-hewlett-packards-impulse-buy-didnt-pay-off |title=Why Hewlett-Packard's Impulse Buy Didn't Pay Off |website=[[Bloomberg BusinessWeek]] |date=November 29, 2012 |quote=Apotheker believed that HP's platform was sinking&nbsp;... [and] appeared to be in a hurry to transform the company&nbsp;... In a rapid series of moves announced in August 2011, Apotheker killed HP's six-week-old TouchPad tablet, explored plans for a spin-out of its PC business, and championed the {{US$|long=no|10.3 billion}} acquisition of Autonomy. One former HP executive who worked there at the time says it appeared that Apotheker and the board didn't know what to do, and were trying anything they could think of. It wasn't a strategy, he says. It was chaos&nbsp;... Oracle CEO Larry Ellison called Autonomy's asking price 'absurdly high'. |archive-url=https://web.archive.org/web/20121203051546/http://www.businessweek.com/articles/2012-11-29/why-hewlett-packards-impulse-buy-didnt-pay-off |archive-date=2012-12-03 |url-status=dead}}</ref><ref name="telegraph19aug2011">{{cite news|url=https://www.telegraph.co.uk/finance/newsbysector/industry/8709821/Autonomy-board-backs-7bn-Hewlett-Packard-offer.html |archive-url=https://ghostarchive.org/archive/20220111/https://www.telegraph.co.uk/finance/newsbysector/industry/8709821/Autonomy-board-backs-7bn-Hewlett-Packard-offer.html |archive-date=January 11, 2022 |url-access=subscription |url-status=live|title=Autonomy board backs £7bn Hewlett-Packard offer|newspaper=[[The Daily Telegraph]]|date=August 19, 2011}}{{cbignore}}</ref><ref name="reuters3oct2011">'{{cite web|url=https://www.reuters.com/article/us-hp-autonomy-idUSTRE79269E20111003|title=HP closes Autonomy deal|website=[[Reuters]]|date=November 3, 2011|quote=Hewlett-Packard completed its $12 billion buy of British software firm Autonomy on Monday, the centerpiece of a botched strategy shift that cost ex-chief executive Leo Apotheker his job last month. HP said its 25.50 pounds-per-share cash offer – representing a 79 percent premium that many HP shareholders found excessive – had been accepted by investors.}}</ref> The Autonomy acquisition was objected to by HP's own CFO.<ref name="telegraph25nov2012">{{Cite web |date=2012-11-25 |title=Rage of the Titans: Whitman vs Lynch |url=https://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/9700557/Rage-of-the-Titans-Whitman-vs-Lynch.html |access-date=2024-10-10 |website=The Telegraph |language=en}}</ref><ref name="hussainmotion11aug2014" />{{rp|3–6}}

On May 23, 2012, HP announced plans to lay off approximately 27,000 employees, after posting a profit decline of 31% in the second quarter of 2012.<ref>{{cite news|first=Poornima|last=Gupta|date=May 23, 2012|title=Analysts back Hewlett-Packard's layoff plans|work=[[Reuters]]|url=https://www.reuters.com/article/us-hp-idUSBRE84M1DX20120524|access-date=October 7, 2020}}</ref> Profits declined because of the growing popularity of smart phones, tablets, and other mobile devices, which slowed down personal computer sales.<ref>{{cite web|title=HP announces 27,000 job cuts|url=http://timesofindia.indiatimes.com/tech/careers/job-trends/HP-announces-27000-job-cuts/articleshow/13435786.cms|work=The Times of India|url-status=dead|archive-url=https://web.archive.org/web/20120525055418/http://timesofindia.indiatimes.com/tech/careers/job-trends/HP-announces-27000-job-cuts/articleshow/13435786.cms|archive-date=May 25, 2012|access-date=March 30, 2018}}</ref>

In May 2015, the company announced it would be selling its controlling 51 percent stake in its [[China|Chinese]] data-networking business to [[Tsinghua Unigroup]] for a fee of at least {{US$|long=no|2.4 billion}}.<ref>{{cite news|first=Yimou|last=Lee|date=May 21, 2015|title=HP sells {{US$|long=no|2.3 billion}} China unit stake to forge partnership with Tsinghua Unigroup|work=[[Reuters]]|url=https://www.reuters.com/article/us-hp-m-a-tsinghuaunigroup/hp-sells-2-3-billion-china-unit-stake-to-forge-partnership-with-tsinghua-unigroup-idUSKBN0O703V20150522|access-date=October 7, 2020}}</ref>

HP filed a lawsuit in California Superior Court in Santa Clara, claiming that Oracle had breached an agreement to support the [[Itanium]] microprocessor used in HP's high-end enterprise servers.<ref>{{cite web|first=Jack|last=Clark|website=[[ZDNet]]|url=https://www.zdnet.com/article/hp-unleashes-lawyers-on-oracle-over-itanium-support/|title=HP unleashes lawyers on Oracle over Itanium support|date=June 16, 2011|access-date=October 7, 2020}}</ref> On June 15, 2011, HP sent a "formal legal demand" letter to Oracle in an attempt to force them to reverse its decision to discontinue software development on Intel Itanium microprocessors<ref>{{cite news|first1=Poornima|last1=Gupta|first2=Dan|last2=Levine|work=[[Reuters]]|url=https://www.reuters.com/article/us-hp-oracle-lawsuit/hps-latest-lawsuit-heightens-rivalry-with-oracle-idUSTRE75E6VI20110615|title=HP's latest lawsuit heightens rivalry with Oracle|date=June 15, 2011|access-date=October 7, 2020}}</ref> and build its own servers.<ref name="businessinsider.com">{{Cite web|last=Bort|first=Julie|title=Hewlett Packard Enterprise just won $3 billion in a lawsuit against Oracle|url=http://www.businessinsider.com/hpe-wins-3-billion-from-oracle-2016-6|date=June 30, 2016|access-date=August 13, 2016|website=Business Insider}}</ref> HP won the lawsuit in 2012, which required Oracle to continue producing software compatible with the Itanium processor.<ref>{{cite news|last1=Gallagher|first1=Sean|title=HP wins judgment in Itanium suit against Oracle|url=https://arstechnica.com/information-technology/2012/08/hp-wins-judgement-in-itanium-suit-against-oracle/|access-date=July 1, 2016|work=Ars Technica|date=August 1, 2012}}</ref> HP was awarded $3 billion in damages against Oracle on June 30, 2016,<ref name="businessinsider.com" /><ref>{{cite news|last1=Bright|first1=Peter|title=HP awarded $3B in damages from Oracle over Itanium database cancelation|url=https://arstechnica.com/information-technology/2016/06/hp-awarded-3b-in-damages-from-oracle-over-itanium-database-cancellation/|access-date=July 1, 2016|work=Ars Technica|date=June 30, 2016}}</ref> arguing that Oracle canceling support damaged HP's Itanium server brand. Oracle said it would appeal both the decision and damages.

The [[Serious Fraud Office (United Kingdom)|Serious Fraud Office]] (SFO) and the SEC joined the [[Federal Bureau of Investigation|FBI]] in investigating the potential anomalies. HP incurred damage with its stock falling to its lowest in decades.<ref name="rogers2012">{{Cite news|author=James Rogers |date=November 24, 2012 |title=HP's Autonomy Hassles |at=Tech |work=[[TheStreet]] |url=http://www.thestreet.com/story/11774534/1/hps-autonomy-hassles-tech-weekly-recap.html |access-date=January 22, 2013}}</ref><ref name="bbcstaff2012">{{cite news |date=November 21, 2012 |title=Autonomy misled HP about finances, Hewlett-Packard says |work=BBC News |url=https://www.bbc.co.uk/news/business-20412186 |access-date=January 22, 2013}}</ref><ref name="owens2012">{{Cite news|author=Jeremy C. Owens |date=November 23, 2012 |title=Investors go Black Friday shopping too, sending HP and other struggling tech stocks higher |newspaper=[[San Jose Mercury News]] |url=http://www.mercurynews.com/60-second-business-break/ci_22054748/biz-break-investors-go-black-friday-shopping-too |access-date=January 22, 2013}}</ref> Three lawsuits were brought by shareholders against HP for the fall in value of HP shares. In August 2014, a [[United States district court]] judge threw out a proposed settlement, which Autonomy's previous management had argued would be [[collusive lawsuit|collusive]] and intended to divert scrutiny of HP's own responsibility and knowledge. It essentially engaged the plaintiff's attorneys from the existing cases and redirected them against the previous Autonomy vendors and management for a fee of up to {{US$|long=no|48 million}}, with plaintiffs agreeing to end any claims against HP's management and similarly redirect those claims against the previous Autonomy vendors and management.<ref>{{cite news|date=August 25, 2014|title=U.S. judge casts doubt on HP-shareholder settlement in Autonomy lawsuit|work=[[Reuters]]|url=https://www.reuters.com/article/hp-autonomy/u-s-judge-casts-doubt-on-hp-shareholder-settlement-in-autonomy-lawsuit-idUSL1N0QV15P20140825|access-date=October 7, 2020}}</ref><ref>{{cite web|date=August 25, 2014|title=US Judge Rejects Settlement Deal Reached In HP's Derivative Lawsuits|url=https://www.rttnews.com/2374756/us-judge-rejects-settlement-deal-reached-in-hp-s-derivative-lawsuits.aspx?type=bn|access-date=October 7, 2014|website=RTTNews}}</ref> In January 2015 the SFO closed its investigation as the likelihood of a successful prosecution was low.<ref>{{cite news|url=https://www.bbc.co.uk/news/business-30883288 |title=Autonomy HP sale investigation by Serious Fraud Office closes |work=BBC News |date=January 19, 2015}}</ref> The dispute continued in the US, and is being investigated by the UK and Ireland [[Financial Reporting Council]]. On June 9, 2015, HP agreed to pay {{US$|long=no|100 million}} to investors who bought HP shares between August 19, 2011 and November 20, 2012, to settle the lawsuits over the Autonomy purchase.<ref>{{Cite news|date=June 9, 2015 |title=Hewlett-Packard to Pay {{US$|long=no|100 Million}} to Settle Suit Over Autonomy Purchase |work=The New York Times |url=https://www.nytimes.com/2015/06/10/business/dealbook/hewlett-packard-to-pay-100-million-to-settle-suit-over-autonomy-purchase.html |access-date=June 9, 2015}}</ref>