What Goes Up Will Come Down

HP’s stock is destined to jump in the next few weeks.  What will benefit short-term investors is bound to cost long-term employees, suppliers and investors.

HP’s new leader is indicating HP will benefit from deep layoffs and cost restructuring. The CFO is publicly stating that there will be no change in strategy nor business direction.  Investment analysts and traders are cheering.  Deep cuts are sure to provide short-term P&L improvement.

But at what cost to long-term growth and viability?  HP’s businesses are highly competitive in all areas.  They are fighting battles on all fronts, with little in the way of new fighting materials.  Reducing the army size will lower the demands, but how will they win?  Where’s the White Space for new growth initiatives when the focus is on draconian cost reductions?

Traders are buying, but these actions look about as sustainable as floating a cardboard balloon.

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