Yessir, Someone Is Definitely Worried About HP's Quarter

Another day, another memo leaks out from the tech giant Hewlett-Packard. And this one is a doozy.

Last week I obtained two memos sent to the heads of Hewlett-Packard’s PC business units in Europe and Asia, ordering them to freeze hiring and to restrict travel in order to keep costs under control. Someone was clearly worried about the results that HP is going to report on Thursday.

We now know who that person was: CEO Léo Apotheker. In yet another memo, this one leaked to Aaron Ricadela at Bloomberg News, Apotheker warns key lieutenants including Executive VP Todd Bradley and CFO Cathie Lesjack, saying Q3 will be a “tough quarter,” and says, “We have absolutely no room for profitless revenue or any discretionary expenditures.”

In the May 4 memo, according to the Bloomberg story, Apotheker describes HP’s current headcount plans as “unaffordable given the pressures on our business.” HP is also in the midst of a “a full headcount re-planning process,” led by Lesjack and Tracy Keogh, the VP for human resources, the memo says, meant to bring the company’s headcount, now at 324,600, in line with “the new realities of the market and our position.” That sounds like a round of layoffs is coming. First Cisco, now HP.

HP shares have been taking a beating in recent days. On May 11, when I published the memos I obtained, HP shares fell 41 cents or more than 1 percent to $41.06. Today they closed at $39.80 during the regular session, but are falling even more after hours on the news of this memo. As of 2:10 pm PT, HP was trading at $37.77, down $2.03 or more than 5 percent from the regular session close.

Update: HP just announced that it will now announce its earnings at 4:30 AM Pacific Time or 7:30 Eastern Time Tuesday. The conference call will be held an hour later. Well there goes my morning. See you all then.