Bloodletting

Just as you can’t make a patient healthy by bleeding them to death, one can’t make a business healthy by simply laying off employees. Recently, HP announced that it would reduce staff by 29,000 (CNN) with the goal to simplify business practices and accelerate innovation (BGR).

Massive layoffs are a sign of bad management (Forbes), the same kind of quackery that bloodletting is to medicine. The best profit making and revenue creating ideas are likely to come from those people who work directly in the trenches. But HP isn’t picking its most innovative thinkers to stay, it’s selecting by age through early retirement. Given an even distribution of talent across all age cohorts, as HP eliminates older and more expensive workers it will be cutting the very people it needs.

HP is now a dead man walking.  At Sun Microsystems in 1990, I heard Bill Joy say, “No matter who you are, most of the smartest people work for someone else.”   Increasing the number of smart people that will work for someone else is not The HP Way.  After years of growth through acquisition, HP leadership must no longer believe that employee brainpower is the company’s most valuable resource.

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