Counterculture: Slash & Burn May Not Save HP

By now, you all know that Meg Whitman, the new CEO of Hewlett-Packard Co. (NYSE: HPQ), has decided to dump almost 30,000 US employees. She says she's able to do this without shedding any of HP's major businesses while increasing efficiency in the company's sales force and creating new products.

To a layman like me, this seems like bad news. But HP stockholders -- the majority probably large corporations like HP -- are popping the bubbly. The quarterly report is going to look great, and the dividends are going to flow like... well, champagne. Also, good news for HP's 324,000 workers in China: they're too cheap to need firing.

Now, I'm not the sort of corporate P&L nerd who usually follows news like this. I noticed this story because I'm a politics nerd. The name "Meg Whitman" recalled for me her unsuccessful 2010 bid (running as an ultra-conservative) for governor of California. By strange coincidence, another right-wing former HP CEO, Carly Fiorina, also lost a 2010 election in California, to Senator Barbara Boxer.

My favorite memory of Carly is a keynote "speech" -- but not really a speech -- at the Consumer Electronics Show years ago. Carly spent a lot of time on stage trying to dance with two gorgeous 20-something TV stars (whose names escape me and whose show was cancelled) while raving about HP's "hot" new line of cellphone surface decorations, including sexy designs like plaid, death's-head skulls, polka dots, and leopard spots. I recall wondering if this sort of performance by its CEO didn't compromise HP's dignity. But Carly, betraying nary a smidgen of shame, pulled it off.

Although a couple of male CEOs served between Carly and Meg, I can't help but identify today's Hewlett-Packard with these two women. This isn't because they're women, but because their mutual ideology is so vehemently conservative. This is not the Hewlett-Packard of yore.

Under the leadership of Bill Hewlett and Dave Packard, HP was famous beyond Silicon Valley because its founders treated their business as a family, paying above scale, providing generous benefits, and doing their best to retain workers even in an era when mobility was endemic in the booming electronics industry. HP, which continues to win recognition as one of America's most admired companies, sits alongside a handful of other companies of bygone days, such as Bell Labs and Johnson Wax, which faithfully took to heart the wellbeing of their workforces.

However, that sort of attitude toward workers seems as quaint today, among corporate leaders like Carly and Meg, as the repentant Ebenezer Scrooge vowing to save Tiny Tim's life and help Bob Cratchit raise his family. In today's Wall Street-driven corporate environment, Bob Cratchit would either have to prove that Tiny Tim's survival would juice the quarterly numbers, or else he'd better go casket-shopping.

So it goes, even at HP. The latest 30,000 or so casualties verify the company's change in workforce philosophy. HP's a family no more. Still, I wonder if this has to be. During the Great Recession, many German companies -- with government encouragement -- forestalled mass layoffs by reducing hours among all employees. This caused hardship but the pain was spread equally. Workers kept their jobs and benefits, and, when the economy began to improve, they got their hours back. German companies that embraced this strategy were able to ramp up faster, at lower cost, because they didn't have to hire and train new people.

A few US companies followed the German example, not only benefiting as businesses but winning the praise, loyalty, and outright affection of their workers. I'm not sure if anyone has ever measured the uptick in productivity for companies that fight to keep their people on the job, but I suspect it's there.

This leads me to one last reflection. Ruthlessness toward workers -- an eagerness to sustain profit and reward executives by decimating the rank-and-file -- has become a shibboleth common to both business orthodoxy and conservative politics. At the expense of being regarded as "liberal," the founders of Hewlett-Packard defied this orthodoxy, occasionally sacrificing the bottom line to job security for the HP workforce. By contrast, HP's two contemporary celebrities, Carly Fiorina and Meg Whitman, have proved they can be as tough as any male CEO by proudly embodying the conventional, all-hands-off-deck wisdom.

The funny thing is that Hewlett and Packard built an empire by caring for their people. Forsaking that ideal, Carly and Meg have led the empire into decline. I can't help wondering if there's a lesson here.