HP CEO: We Have More Cutting To Do

Hewlett-Packard Chairman and CEO Mark Hurd reinforced his reputation for fanatical attention to efficiency at his meeting Tuesday with financial analysts in New York, where he said HP still has a long way to go to strip all the unnecessary costs from its business. Since taking the top job at HP 20 months ago, Hurd has zeroed in on cost-cutting, illustrated most vividly by HP's layoffs of more than 15,000 employees. Hurd's restructuring helped HP lift its earnings of $6.8 billion on sales of $91.7 billion in its most recent fiscal year, but there's still a lot of fat to be trimmed, according to Hurd. "I must say that's one of the things that surprises me the most. We made a onetime restructuring, and everyone says, 'Boy, you must be efficient now,' " Hurd said. "I wish it was that easy. We still have a lot of work to do." HP has inventoried its expenses in microscopic detail -- from IT costs per employee to the logistics costs of every product unit it carries -- to help company executives decide what to shed and where to invest. "When we shut down a floor, that enables us to put 14 salespeople on the street," Hurd said. Growing HP's sales coverage is a key priority for Hurd. Though he focused his remarks on HP's efforts to build a top-quality direct sales force, he also touched on its channel ecosystem. "Our partners can get to places we can't get to fast enough with a 'direct' sales force," Hurd said. Hurd lined his comments about HP's lingering bloat with optimistic remarks about its market opportunity and positioning. Flashing a PowerPoint slide suggesting that HP faces a $1 trillion addressable market, Hurd quipped, "After a careful analysis, we have determined that that is big." He also said he is "pleased" by HP's overall progress in the past year. HP is focused on organic growth and doesn't expect to do huge acquisitions, with a few rare exceptions like its $4.5 billion purchase of Mercury Interactive, Hurd said. Still, HP announced an acquisition this morning: The Palo Alto, Calif., IT giant is buying Knightsbridge Solutions Holdings, a Chicago-based services company that focuses on business intelligence, data warehousing and data integration. Financial terms of the deal weren't disclosed. Knightsbridge will bring 700 employees in the United States and London to HP's Technology Solutions Group when the deal closes, which is expected in the next 30 days. HP's other executives, including retiring CFO Bob Wayman, will present throughout the day at the analysts meeting, and Hurd will take the podium again later to field analysts' questions. On top of his mission to slash costs, Hurd remains sharply focused on boosting sales. "We have had a theory in the company for a long time that if we had great technology, customers would find it," he said. "We have a new, advanced theory that if we actually try to sell the stuff, we'll get more revenue."