The move is said to be a sign of “waning confidence” in HP’s status as a PC manufacturer.
Irish Examiner reported on the removal of HP from the Dow Jones Industrial Average, a move which it states comes during an “historic slump” in the PC industry, and which signals “another blow” to HP CEO Meg Whitman’s attempts to “revive growth” at the company.
HP shares have declined for three straight years, with its revenue falling eight percent alone in 3Q13, and Irish Examiner notes that the trend for consumers to “abandon PCs for smartphones and tablets” has played a part in the company’s decline. It added that Whitman herself “scrapped” a forecast for a return to growth in 2014 last month, with “lacklustre demand” and “aggressive price cuts” adding to the issue.
Shannon Cross, Analyst at Cross Research, stated that the departure of HP from the Dow “reflects” the challenges it has faced, adding that “it’s certainly not something you want to happen on your watch. The Dow is more about symbolism and prestige than anything else”. Bank of America is among one of the other companies removed from the Dow, with Microsoft, Intel, IBM and Cisco Systems retaining their positions. Visa, Nike and Goldman Sachs in turn have been added.
The Recycler reported earlier this week on the 22,700 jobs cuts that HP has been forced to make due to restructuring over the past year.