Hewlett-Packard Chief Executive Leo Apotheker said in an interview with CNBC that the world's largest PC maker is going to "try to get to the bottom of this" after three of his company memos were leaked to the media.
The memos, two of which were leaked to All Things Digital and the third to Bloomberg, warned of upcoming cost-cutting measures for the company, telling top execs to "watch every penny and minimize all hiring" and said the firm's current workforce plans were "unaffordable given the pressures on our business."
On the CNBC show "Squawk Box," Apotheker said the cost-cutting measures were being put into place because of the earthquake and tsunami that struck Japan in March, weak PC sales and a slowdown in HP's tech services business -- each reasons that HP cited as it trimmed back its profit projections for the year on Tuesday alongside its earnings report.
"We were affected by Japan," Apotheker said on the show. "It's very hard to forecast a tsunami. And because of our exposure to Japan, we wanted to be prudent. We didn't do anything more than just to do prudent margin management, and actually our investors should applaud us for doing that."
The moves also show that HP is focused on long-term growth, and not just short-term profit, he said.
"I could have continued operating the business as we have been," Apotheker said on CNBC. "But that would not have set us up for medium- or long-term growth. The point is to succeed from our cloud and connect strategy. So we execute now. Now is the time. We're going to make a few changes and therefore, we have to readjust our margin expectations for services."
The memos, Apotheker said, also demonstrate that HP was making the correct steps to manage profit expectations given the concerns in the areas mentioned.
"We knew that there was an issue in Japan and a softness in the consumer PC segment and wanted to make sure that we were covered for that," he said. "Now that was pretty clear, we were very transparent about that. It's unfortunate that such a memo leaked. But it's part of day-to-day management."
Apotheker later said he would find our just how the memos made their way to the media.
"It is very unfortunate that these things happen and we will try to get to the bottom of this," Apotheker said. "But I have full confidence in the team that I am working with and we'll continue to execute."
The chief executive also said, that while PC sales were likely to remain soft for the rest of the year, it won't affect HP's plans to offer new PCs, tablets and smart phones running the company's WebOS operating system.
"On the commercial side, PCs are doing extremely well," Apotheker said. "On the consumer side we believe there will be some continued weakness for another couple quarters, but the PC will remain the main computing device. But we are also very excited about our WebOS devices, in particular the TouchPad, that is still scheduled for this summer."
-- Nathan Olivarez-Giles
Photo: Hewlett-Packard CEO Leo Apotheker. Credit: Tony Avelar / Bloomberg News