The Decline of HP...What Happened?

HP used to be one of the biggest, most innovative technology companies in the world. This video attempts to explain how they've fallen from those heights.

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Company Declines:
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[alebaba]

I have been working at HP for about 2 years now. Ever since HP hired Enrique Lores as the new CEO, they have been making a huge push to treat their employees better. HP has been working very hard to repair their image these past few years in my experience.

[tedjohnson]

Worked at HP for nearly 3 decades. The company really went downhill when... they hired the first CEO from outside the company: Carly Fiorina. She made many poor decisions designed to juice stock price, and treated employees like crap. Outsourcing became the primary tactic, and much internal talent was lost. Many other subsequent CEOs followed the same destructive paradigm.

[IMSAIGuy]

I worked 25 years with HP. Carly killed it. The board was stupid to hire her and to break up the company. They should have kept the company together and promote Ann Livermore to CEO.

[thatunicornhastheaudacity]

My Mom worked for HP and she really attests to the fact that Mr.Hewlett and Packard really stood by their employees. She started as a janitor and worked her way up to a graphic artist. She did alot of designs, photography and general advertising to other commercial prospects, (slideshows and meeting pitches, ect.) She would take the new graphic design software they were tinkering with and make sales pitches of it. She was a training to be a draftsman, (they actually changed the title to drafts person in her branch because she was the only woman. Pretty progressive for the late eighties, early nineties I'd say.) My Dad did plating and assembly with HP, which is actually how they met. Both have told me after Mr. Hewlett and Packard left, the company started to go down hill. My Mom still gets teary eyed discussing that part of her career life.

[SaltyPirate]

I'll tell you what happened to HP in 3 words: Compaq, Carly Fiorina. She destroyed HP's corporate culture of humility and personal accountability and tried to replace it by counterfeiting Hewlett and Packard's "garage engineering" like waving a magic wand. She kept a copy of their book, "The HP Way" at hand, but was mentally incapable of grasping the point. Carly was the first HP ceo that was from outside the company and her management style was like some amateur cook who thinks they can become a chef by buying more kitchen gadgets. Her decision to merge with Compaq was done against the wishes and advice of the people who had built and driven HP for 60 years. The Compaq merger was like tying an anchor around the neck of an Olympic swimmer and wondering why he started drowning. In her mind swimming=water=boats=anchor. She destroyed the corporate culture that had been extremely successful by replacing it with a business school derivative that she tried to convince the employees was just a more efficient restyling of the original and then gave them an anchor when they needed a lifeline and inspiration. Her brutal business school management made employees feel mistreated, over worked and unappreciated.
That is how you destroy a blue chip company, not re-energize it. Carly Fiorina is a textbook example of someone being educated beyond their intelligence.

[ReaverPrime]

I haven't had too many issues with HP computers. They have been relatively reliable. Their printers on the other hand... Dog water of the highest degree. Not only are they expensive, but they break down fairly often and the ink is costly.

[AlvoriaGPM]

Ah HP. The company that builds printers that lie to you about your ink levels so that they can sell ink at a 10, 000% markup, creates laptops deliberately made to not be upgradable, and where everything is designed to fail right after the warranty expires. Super shocked that CM didn't mention them being taken to court, repeatedly, over these shenanigans.


*EDIT:* This post has really blown up and it's wonderful to see all of the good points in agreement as well as those in objection to it. The replies have become a rather good list of HP products, laptops in particular, that are more reliable than others. If you want to go with HP for some reason, check below for a recommendation list.

[allenwiddows]

I know the quality of HP products are not what they used to be. For the longest time, you wanted a quality printer, you got an HP—that has not been the case in the consumer market in a long time. I purchased an HP-11C calculator for $60 back in 1982; it still runs like a champ forty years later, while those HP calculators bought by friends in the past decade have not lasted much past a few years. Back in the late ‘80s, I worked at a company that used HP 3000 mini computers (talk about a long-dead niche) and those machines are still running, 22 years after HP stopped supporting them. (Third party suppliers are maintaining the OS and supplying parts, when needed.) This type of longevity for products just doesn’t seem to fit into the HP of today…

[tropictiger]

HP used to make pretty okay laptop heater combinations. You could keep an entire room warm by just having a laptop switched on.

[kazik]

As a person who was tied to HP heavily, the hire of Carly Fiorina in 1999 was the start of the destruction of HP. She pretty much destroy the original HP structure and blew up the whole company. It never recovered from her.

[thewiirocks]

You forgot about HP’s commitment to the Itanic which killed their high-end business about the same time they bought Compaq and tanked their (very profitable and amazingly quality) printer business. Not to mention effectively eliminating their calculator business which TI owns the marketshare for to this day. Fiorina did a real number in her time there. It only went downhill after.

[Thermalburn]

My wife exclusively used HP laptops for work because we found them to be the best when it came to price-performance scale. The last one we purchased about a year ago has been terrible. Constant hardware failures, leading to us sending the laptop in for a new one; mind you, I work as an IT engineer so I know what Im doing when it comes to PC troubleshooting. I ended up finally buying her a different laptop from another manufacturer. And dont get me started on the HP printer we have at home, which is a higher end "enterprise" printer not an average home printer; I would have hurled that thing out the window by now if I hadnt spent so much money on it. Absolutely garbage tier products

[wiregold]

I grew up in Cupertino back when it was part of San Jose. HP was everywhere and everyone knew a neighbor, friend, or had a family member working for HP. As a kid I actually played with an HP35 before it was released and I knew then I wanted to work for this company.
I started for them in the mid-80s when Bill and Dave still ran the show. HP ran on net 10% profit and poured the rest back into employee benefits, salaries, and R&D. It was the best job you could want. I was able to afford a 3-bedroom home with acreage on a technician's salary.

The spiral down began in the late 80s when it was decided individual performance would no longer be measured and HP would take 20% net profit. Your pay was frozen essentially with annual raises of <1% (10 cents/hr) for all non-exempt employees because we were one big team. The poorest performers were empowered to make changes as there were no bad ideas. The best people left that sinking ship and mostly deadwood remained within 2 years.
As a top performer I was saddened by what I was witnessing. Around 1992, I was tasked with preparing four 35665A digital signal analyzers to be sent to China. I questioned my manager about sending our cutting edge tech with custom chip-set to a country that was not allowed to buy that level of tech. I was told the equipment was "on loan, not being sold ..." I said the chance of them returning the boxes was really low (they did return 2 of the 4). We gave them everything related to source code, development, and construction/testing of all our equipment (US Navy, Air-force, and NSA were typical customers for our gear).
I pointed out the Chinese would soon reverse engineer the 2 missing boxes and be building copies of our tech. I asked, "What are we were going to do for jobs?" My manager (Bruce Richards) laughed in my face and with a hand gesture said, "We'll build something else."
It wasn't long before the Chinese developed the first wave skimming anti-ship missile, Silkworm, using HP's digital signal processors and curve-fitting algorithm.
As a reward, HP did get the right to sell Lazer Jet printers in all of China.
I bailed after more than a decade and got an engineering degree in an unrelated field.

[DrElectron]

I worked as an engineer for HP from 1976 to 1984. Those were the days when employees would say HP stood for "Happy People". Focusing on technology, innovation, and quality, HP continued to prosper into the 1990s. The beginning of HP's demise came when the Board brought in Carly Fiorina as CEO. Up until that point, all HP CEOs had been HP engineers with technical understanding but more importantly, an understanding of the culture of the company (aka The HP Way). Carly was a marketing person. She touted innovation in ads with pictures of the garage where HP started. However, instead of using the innovative horsepower she had within HP to grow the company, she elected to buy Compaq. After the Carly debacle, the Board brought in another outsider, Mark Hurd, who was strictly operationally focused. With all of the layoffs, Hurd had some improved short term financials but at the cost of employee morale.

[vpilot]

I worked for HP in Britain in the 1980s. I visited HP Palo Alto and I saw an email stapled to someone's wall. It was a reply from Dave Packard. Someone had written "Dave, is it true that you once said you would fire a manager if he sacrificed quality to meet a deadline?" Packard had replied "Yes, and I meant it".

[jeffhartman]

My experience with HP goes back about 50 years: first using their oscillators and oscilloscopes, then their calculators, and a succession of printers starting with a LaserJet III. The common thread to their products was a combination of performance, quality, and reliability. The 200CD oscillator in my basement is about 70 years old and still works flawlessly. My first calculator was an HP-67 that was stolen; the HP-25 that replaced it still works today (as do the dozen or so successors I have gotten over the years and still use today).

Unfortunately the quality and reliability have taken a nosedive as the company has evolved from largely focusing on making engineering resources, to becoming a consumer product manufacturer. This, along with the drift from “the HP way” to a shareholder driven corporate mindset, has destroyed their once incredible reputation. In short, they lost sight of who they were and what made them special.

[zeroelus]

It seems so similar a story to Boeing. A well regarded powerhouse of engineering and innovation with a flat structure, that got "modernized for the shareholder" and then immediately lost the thing that made it special.

[EduardoSantos-qnco]

Former HP employee, joined right after Carly was ousted and left in 2010. First time Hurd met with us, I asked why HP was never included in Best Places to Work. His response to me was “That list is not anything we care about or track”. Spoke volumes.

[foothilldave]

I was also a 30+ year employee starting in 1980 (good times back then) and I think this article does hit the main points right on. I'd add one more that is a side-effect of the "only stock price matters" attitude - HP started dumping it's engineering brain power with the assumption that everything can be subcontracted. The engineers, trained and HP-in-bred that innovation was everything, were really the driving force behind HP, as Bill and Dave would tell you if they were still around. You can't buy that, especially on the cheap.

[andrewcopple]

In the 80s they let go of SO MUCH of their research staff. My professor at ASU who worked at several semiconductor industries was told by his HP manager that the work he wanted to do on semiconductor technology, pioneering new technology, would only be done in the future at universities. They and many other companies seem to have chosen to offload their R&D to universities. A truly depressing choice.