The once-proud company called Hewlett-Packard continues its long, slow decline, with an announcement it will lay off 28,000 to 33,000 people, or ten percent of its workforce, as part of its plan to split the company in two in November. That comes on top of 50,000 cuts that have already occurred.
CEO Meg Whitman, not one to sugar coat things, stopped short of saying there won’t be more layoffs. “A big step forward will be if enterprise services can stop shrinking,” she said.
Coming on the eve of tonight’s Republican debate, some commentators thought the news could be an embarrassment to former CEO Carly Fiorina, as she rises in the GOP field. But HP’s troubled enterprise services division – the former EDS, a company founded by another one-time presidential hopeful, Ross Perot – was actually acquired for $13.9 billion in 2008, well after Fiorina was fired, by her successor Mark Hurd, who also was fired and is now co-CEO of Oracle. At the time, Hurd said “the combination of HP and EDS will create a leading force in global IT services.”
The EDS acquisition is not to be confused with the disastrous 2011 purchase of Autonomy for $11 billion by CEO Leo Apotheker, who also was fired.
Meg Whitman (number 7 on our new Most Powerful Women list) has been CEO for four years now and is struggling to stop the bleeding. Her point of pride? “We haven’t done anything stupid in the last four years,” she said yesterday, “and we don’t intend to do anything stupid in the future.” Not clear whether that will be enough to turn the company around.
Meanwhile, give someone credit – but not to Fiorina, since it was created by her “unaffiliated” superPAC – for this wonderful advertisement released this week, taking of advantage of Donald Trump’s boorish “look at that face” comment. It is one of the high points of a campaign that, so far, has had mostly low ones.
Enjoy the day, and don’t do anything stupid.
• SABMiller gets takeover offer
SABMiller has received a takeover bid from Anheuser-Busch InBev, a deal that could create a massive $245 billion beverage giant that would vastly dominate the beer market. Shares of SABMiller, which has a market capitalization of about $75 billion based on Tuesday’s closing price, jumped sharply in response to the takeover interest news. The U.K. Takeover Panel has set a deadline of Oct. 14 for Anheuser-Busch to make an offer or withdraw. WSJ (subscription required)
• Shares rise ahead of Fed decision
The world’s markets rose on Wednesday and the U.S. dollar was practically frozen against global currencies, as investors prepared for the first potential interest rate hike in the U.S. in almost a decade. “It’s more a day for thinking about tomorrow,” said a London-based currency strategist. The Fed kicks off a two-day meeting on Wednesday, with Fortune recently reporting the Fed may postpone action on interest rates at this time. Reuters
• UAW-Fiat Chrysler reach deal
Fiat Chrysler and the United Auto Workers, a union that represents 35,700 of the auto maker’s workforce, have reached a tentative agreement that addresses health care costs and a two-tier pay structure. One of the main issues of contention has been the union’s two-tier pay system that members say has divided factory floors – under which newer workers are paid a lower hourly rate. Fiat Chrysler said it will go away “over time,” but didn’t specify if the system would be completely eliminated under the tentative deal. The Detroit News
Around the Water Cooler
• GM’s drive-by discounts
General Motors has launched a new program through the auto maker’s OnStar mobile application that will give drivers information about discounts retailers are offering near their location. While GM has already hooked up with retailers like Dunkin’ Donuts for the offering, Fortune questioned if people would actually use a mobile coupon generator. And while in-vehicle technology is big business, coupons could be a feature that is just completely ignored altogether. Fortune
• Inside the CEO space race
The original “Space Race” was between the world’s two most powerful nations at the time: the United States and the Soviet Union. Today, rich corporate leaders are competing in an out-of-this-world race that involves Telsa Motors CEO Elon Musk, Virgin Group’s Richard Branson and now, Amazon’s Jeff Bezos. Bezos announced his private aerospace company would set up a launch site in Florida, where his company (called Blue Origin) will build orbital rockets with the goal of achieving its first rocket launch before the end of the current decade. Fortune
• Rich kids eat fast food too
One prevailing narrative when it comes to food is that wealthier individuals generally eat healthier, as they have greater access to better foods and more income to buy grocery stores’ organic offerings. But new data suggests that low-income kids got about the same percentage of their calories from fast food as wealthier kids. The federal survey complicates the view that childhood obesity is linked to “food deserts,” which are areas where nutritious meals are more expensive and hard to come by. Instead, exercise and other factors may be more important. Bloomberg
5 things you need to know today
Brewing megadeal, Fed meeting starts–5 things you need to know today. Today’s story can be found here.