HP beefs up ad budget for new campaign
Hewlett-Packard's new ad campaign will cost the company an extra $60 million this quarter as it tries to boost its brand in the minds of businesses and consumers.
The new branding campaign will add $60 million to HP's ad budget compared with last quarter, Chief Financial Officer Bob Wayman said in an interview. However, the company could make cuts in other areas to help offset the costs, he added.
One area where the company is definitely cutting back is its staff. HP disclosed Wednesday that it is eliminating 17,900 jobs--1,100 more than its most recent update and 2,900 more than the company's original plan. HP anticipated the additional cuts last quarter but, since they were part of a voluntary program, the company didn't know how many people might ultimately take part, Wayman said.
Although an exact number can't yet be given, Wayman said he does not expect many more cuts above the currently announced level.
"It's a pretty good number," Wayman said. "Having said that, you have to make a number of assumptions in coming up with those...There will be some deviations."
HP has already cut 12,500 jobs, or 8 percent of its workforce.
Wayman and HP CEO Carly Fiorina also addressed concerns that HP's new PartnerOne program for resellers is alienating its channel partners, which account for two-thirds of HP's revenue.
PartnerOne is designed to reward partners that grab new business, not just ones that fill orders that were going to HP anyway, Fiorina said Wednesday during a conference call with analysts.
"Because it is a program designed to (reward) demand generation (and) because it is a program that distinguishes between stronger partners and weaker partners, you are going to have some channel partners scream," Fiorina said. "The vast majority of our partners think this is an improvement."