No, HP -- Firings Do Not Improve Customer Service
But even allowing for a sordid history in this regard, traders should grab the Xanax after watching the way Hewlett-Packard's(HPQ) recent contention that nearly 30,000 firings, close to 10 percent of the workforce, will actually improve customer service, was simply regurgitated as fact.
HP, seriously. Stop. You are killing me. But media: you're killing me worse.
Here's the deal: HP is obviously in a troubled state. Competition in clouds and tablets from Apple(AAPL) , Amazon(AMZN) , IBM(IBM) and others is proving ruinous. They have to get smarter -- and smaller. They have to fire and HP says the job cuts will come from all areas of its operations. Problem is, firings have a downside, particularly in the area of customer service. It's hard to maintain the same level of service, helping the same number of customers, with less people. Moreover, it's almost metaphysically impossible to improve customer service by cutting staff to ribbons.
Yet HP made the bold claim in its press release that it would do just that. That, of course, is what press releases are for -- throw crud out there and see what sticks.
But look at how much stuck. Take CNNMoney, for one. They passed along the far-fetched claim unmolested by reasons or perspective: "HP said it expects the job cuts to `yield significant improvements in efficiency and customer service' over the next several years," they wrote. And that was that. Plenty of other media outlets, including Gizmodo, did the same.
Traders, beware that when it comes to HP articles, you are not even reading rewritten press releases. You are often just re-reading the press release.