×

CNBC Exclusive: CNBC Transcript: Hewlett-Packard Chairman & CEO Meg Whitman Speaks with CNBC's David Faber on "Squawk on the Street" Today

WHEN: Today, Monday, October 6th

WHERE: CNBC's "Squawk on the Street"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Hewlett-Packard Chairman & CEO Meg Whitman on CNBC's "Squawk on the Street" today, Monday, October 6th. Following are links to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000317405, http://video.cnbc.com/gallery/?video=3000317390 and http://video.cnbc.com/gallery/?video=3000317395.

All references must be sourced to CNBC.

DAVID FABER: LET'S GET TO IT NOW. JOINING ME IN AN EXCLUSIVE INTERVIEW TO DISCUSS THE SEPARATION IS HEWLETT-PACKARD'S CHAIRMAN AND CEO, MEG WHITMAN. MEG, ALWAYS GOOD TO HAVE YOU. I KNOW IT'S BEEN A FEW LONG NIGHTS FOR YOU. MEG, WE'VE TALKED MANY TIMES, IN FACT, EVERY QUARTER, SINCE YOU TOOK OVER AS CEO, HAPPILY, WE HAVE SPOKEN.

MEG WHITMAN: YEAH.

FABER: AND YOU HAVE TALKED ABOUT ONE HP, OFTEN. AND YOU HAVE TALKED ABOUT THE POWER OF THE COMBINED FORCES AT HEWLETT-PACKARD. AND NOW, OF COURSE, YOU'RE TALKING ABOUT THE COMBINED POWER OF HAVING SEPARATED THEM. AND SO I'M LEFT TO WONDER, AS I KNOW OTHERS ARE, IS IT ADMISSION IN SOME WAY THAT YOUR TURNAROUND HAS NOT SUCCEEDED?

WHITMAN: ACTUALLY, QUITE THE OPPOSITE. TODAY IS ONLY POSSIBLE BECAUSE THE TURNAROUND HAS SUCCEEDED. THINK ABOUT WHAT WE HAVE ACCOMPLISHED OVER THE LAST THREE YEARS. A REBUILT BALANCE SHEET, AN INNOVATION PIPELINE THAT IS SIGNIFICANTLY IMPROVED OVER THREE YEARS AGO. I WOULD ARGUE BEST IN CLASS IN THE INDUSTRY NOW. AN INSPIRED WORKFORCE, A NEW LEADERSHIP TEAM, RENEWED CONFIDENCE OF OUR PARTNERS, OUR CUSTOMERS, FRANKLY, OUR SHAREHOLDERS AS WELL. BUT WE HAD TO GATHER OURSELVES AS ONE HP. BUT NOW WE'RE IN THE POSITION TO TAKE ADVANTAGE OF WHAT'S GOING ON IN THE MARKETPLACE AND POSITION THESE TWO COMPANIES FOR GROWTH. THEY GO AFTER QUITE DIFFERENT MARKET SEGMENTS AND WE NOW HAVE THE OPPORTUNITY TO ALIGN REWARDS AND RESULTS, TO RESPOND TO CUSTOMER NEEDS FASTER WITH THESE TWO BIG COMPANIES. SO WE'RE REALLY EXCITED ABOUT THIS. I THINK IT'S GOING TO BE BETTER OFFERINGS FOR CUSTOMERS AND PARTNERS, CAREER OPPORTUNITIES FOR EMPLOYEES, AND WE BELIEVE IT WILL CREATE REAL SHAREHOLDER VALUE.

FABER: NO STRANGER, OF COURSE, TO THOSE WHO HAVE FOLLOWED THE COMPANY CLOSELY, AS A POSSIBILITY. AND YET, YOU CHOSE NOT TO DO IT WHEN YOU TOOK OVER, YOU CHOSE NOT TO DO IT THE YEAR AFTER, OR THE YEAR AFTER THAT. SO WHY NOW?

WHITMAN: WELL FIRST OF ALL, WE HAD A LOT OF WORK TO DO TO GET HP IN FIGHTING SHAPE. THERE WAS A TREMENDOUS AMOUNT OF REPAIR WORK AND GATHERING OURSELVES TO BE ABLE TO COMPETE IN THE NEW WORLD ORDER. AND NOW, THE TIME IS RIGHT AS WE THINK ABOUT WHAT IS THE NEXT PHASE OF THIS TURNAROUND. REMEMBER, WE'RE IN YEAR THREE OF A FIVE-YEAR TURNAROUND. YOUR CALL THAT FY-'15 WAS AN ACCELERATE YEAR. WE THINK THIS IS THE BEST TACTIC TO CONTINUE THIS TURNAROUND JOURNEY AND POSITION HP INTO TWO GREAT NEW COMPANIES THAT ARE REAL SCALE AND HAVE A CHANCE TO MAKE A REAL DIFFERENCE IN A GO-FORWARD BASIS. BUT FRANKLY, BEFORE A FEW MONTHS AGO, WE WERE NOT IN THE RIGHT POSITION TO DO THIS. THIS IS A VERY BIG UNDERTAKING FOR A COMPANY OF ANY SIZE AND SCALE. WE NOW HAVE THE LEADERSHIP, THE GO TO MARKET, THE INNOVATION ENGINE, THE BALANCE SHEET, AND THE CONFIDENCE OF OUR VARIOUS CONSTITUENCIES THAT ALLOWS US TO DO THIS. SO, IT IS THE RIGHT TIME NOW. AND IT WASN'T WHEN I FIRST GOT HERE. I DON'T EVEN THINK IT WAS A COUPLE OF YEARS AGO.

FABER: WELL, YOU KNOW IT'S FUNNY, I MEAN, IT MAY NOT EVEN HAVE BEEN AS LITTLE AS SIX WEEKS AGO, YOU AND I WERE SITTING ON THIS VERY SET, TALKING ABOUT YOUR MOST RECENT REPORTED EARNINGS. AND I ASKED YOU, YOU KNOW, WHAT ABOUT THE IDEA AMONGST YOUR BOARD, PERHAPS, THAT IF THE TURNAROUND DOESN'T WORK, WILL YOU CONSIDER SPLITTING THE COMPANY? HERE WAS YOUR ANSWER.

WHITMAN INTERVIEW FROM AUGUST 21ST: OUR OBJECTIVE IS TO EXECUTE THE TURNAROUND STRATEGY THAT WE LAID OUT THREE YEARS AGO AND WE'RE WORKING VERY HARD ON THAT. BUT AS I'VE SAID TO YOU BEFORE, WE OBVIOUSLY HAVE TO PROVE THAT THESIS. BUT WE DO BELIEVE THAT PROVIDING AN END-TO-END SOLUTION FOR OUR CUSTOMERS IS A VERY IMPORTANT VALUE PROPOSITION. SO, AGAIN, WE'VE GOT TO PROVE THE THESIS, BUT WE FEEL GOOD ABOUT WHERE WE ARE IN THE TURNAROUND.

FABER: SO, MEG, DID YOU NO LONGER PROVE THE THESIS THAT PROVIDING AN END-TO-END SOLUTION FOR YOUR CUSTOMERS IS A VERY IMPORTANT VALUE PROPOSITION?

WHITMAN: LISTEN, WE THINK THIS IS THE BEST ALTERNATIVE FOR OUR CUSTOMERS AND OUR SHAREHOLDERS. THE MARKET HAS CHANGED DRAMATICALLY IN TERMS OF SPEED, AND WE'RE IN A POSITION NOW WHERE WE CAN PURSUE THE TURNAROUND OF HEWLETT-PACKARD, BY THE WAY THE BRAND REMAINS ON BOTH COMPANIES IN ONE FORM OR ANOTHER, AND WE'RE IN A BETTER POSITION TO GET FOCUSED COMPANIES WHO CAN RESPOND MORE QUICKLY. THINK ABOUT THIS FOR A SECOND. THE COMPETITORS FOR OUR PRINTING AND PERSONAL SYSTEMS BUSINESS ARE ALMOST ENTIRELY DIFFERENT THAN THE COMPETITORS THAT WE FACE IN OUR ENTERPRISE GROUP, OUR ENTERPRISE SERVICES BUSINESS, AND OUR SOFTWARE BUSINESS. SO MORE FOCUS, MORE AGILITY, TYING REWARDS TO RESULTS, WE THINK IS GOING TO MAKE A BIG DIFFERENCE AND PROPEL US ON THIS NEXT LEVEL OF THE JOURNEY ON OUR TURNAROUND. SO WE'RE REALLY SO PLEASED WITH WHERE WE ARE TODAY BECAUSE, AS I SAID, IF WE HAD NOT DONE THE HARD WORK, IF WE HADN'T EXECUTED THE TURNAROUND AS ONE HP, WE WOULDN'T BE IN A POSITION TO TAKE ADVANTAGE OF THIS NEXT OPPORTUNITY.

FABER: YOU KNOW, MEG, I'D LIKE TO EXPLORE THIS IDEA OF THE SPEED OF THE MARKETPLACE BECAUSE IT IS SOMETHING I ALSO HEARD FROM JOHN DONAHOE, THE MAN WHO REPLACED YOU AS CEO AT EBAY, LAST WEEK IN ARTICULATING THE REASONS BEHIND THEIR DECISION TO SPLIT PAYPAL AND THE MARKETPLACE BUSINESS AT YOUR OLD COMPANY. WHAT DOES THAT MEAN WHEN YOU AND HE BOTH REFER TO THE SPEED OF THE MARKETPLACE INCREASING? GIVE OUR VIEWERS AT LEAST SOME SENSE AS TO WHAT YOU'RE ACTUALLY TALKING ABOUT IN THE REAL WORLD.

WHITMAN: YEAH. SO EVERY 10 TO 15 YEARS IN OUR INDUSTRY THERE ARE BIG, ENORMOUS TECTONIC PLATE CHANGES WHERE THINGS SPEED UP, PROFIT POOLS ARE IN PLAY, NEW COMPETITORS EMERGE. YOU CAN GO ALL THE WAY BACK FROM THE MAINFRAME TO THE CLIENT SERVER ENVIRONMENT, CLIENT SERVER TO WEB 1.0, WHERE I HAD A FRONT SEAT AT REVOLUTION AND I SAW THIS SPEED HAPPEN. FROM WEB 1.0 TO WEB SERVICES, AND MOBILITY, WE'RE ON THE CUSP OF ANOTHER ENORMOUS CHANGE. EVERYTHING ABOUT HOW COMPUTE IS BEING BOUGHT, PAID FOR, SOLD. HOW APPLICATIONS ARE WRITTEN FROM, YOU KNOW, A LICENSED MODEL TO A SASS MODEL. HOW EMPLOYEES AND CUSTOMERS INTERACT WITH TECHNOLOGY. AND YOU CAN JUST SEE THE PACE OF CHANGE. AND THERE'S TECHNOLOGY THAT IS ENABLING THAT CHANGE THAT WASN'T EVEN AVAILABLE FOUR OR FIVE YEARS AGO. SO WHETHER THAT IS CLOUD OR THE ABILITY TO TAKE HUGE DATA SETS AND GAIN INSIGHT. SO WE HAVE TO TAKE ADVANTAGE OF THOSE CHANGES. AND IF YOU'RE NOT CAREFUL, YOU'LL BE DISRUPTED AND YOU'VE GOT TO STAY ON YOUR TOES AND BE ABLE TO RESPOND MUCH MORE RAPIDLY WHEN THE INDUSTRY IS IN A MORE NORMAL STATE. AND THAT'S, BY THE WAY, THE GREAT THING ABOUT BEING IN TECHNOLOGY. BUT YOU'VE GOT TO BE SET UP TO GO GRAB THOSE OPPORTUNITIES AND MAKE SURE YOU'RE ON YOUR FRONT FOOT.

FABER: RIGHT. I MEAN, TO BE FAIR, THOUGH, YOU MAY SAY THESE TWO COMPANIES WILL BE MORE AGILE, BUT STILL THEY'RE ENORMOUS. I MEAN, WE ARE STILL TALKING ABOUT ENORMOUS EMPLOYEE BASES AND 57 BILLION IN REVENUES ON ONE SIDE, AND 58 BILLION ON THE OTHER. ARE THEY STILL TOO BIG TO BE ABLE TO RESPOND TO THE MARKET OPPORTUNITY?

WHITMAN: NO, THEY'RE NOT TOO BIG. THE GOOD NEWS IS THEY STILL HAVE SCALE, DISTRIBUTION SCALE, PURCHASING SCALE, GO TO MARKET SCALE, BUT THEY ARE NOW MORE FOCUSED. FIRST, HP, HEWLETT-PACKARD ENTERPRISE, WILL BE COMPLETELY NOW FOCUSED ON THE ENTERPRISE SPACE. AND REALLY ON THE STRATEGY AROUND NEW TECHNOLOGY FOR ENTERPRISE, WHILE THE PRINTING AND PERSONAL SYSTEMS BUSINESS WILL BE SOME CONSUMER BUSINESS AS WELL AS THE ENTERPRISE BUSINESS, BUT IN THE DEVICE AND PRINTING AREA WHICH HAS DIFFERENT CHARACTERISTICS. BY THE WAY, BOTH COMPANIES HAVE INCREDIBLE INNOVATION ROAD MAPS AND I THINK THEY'LL BE ABLE TO PURSUE THOSE INNOVATION ROAD MAPS BETTER THAN WE ARE CURRENTLY CONFIGURED. AND YOU HAVE TO REMEMBER, CONTINUITY OF LEADERSHIP IS A PRETTY IMPORTANT THING HERE. I'LL STILL BE THE CEO OF HEWLETT-PACKARD ENTERPRISE, AND I WILL BE THE NON-EXECUTIVE CHAIRMAN OF THE BOARD OF HP INC. SO I'LL MAKE SURE THAT WHERE THERE ARE SYNERGIES THAT WE CAN STILL TAKE ADVANTAGE OF, WHETHER THAT BE SUPPLY CHAIN OR OTHER THINGS, WE'LL TAKE ADVANTAGE OF THAT. BUT WHERE THE COMPANIES ARE BETTER SERVED TO GO 100 MILES AN HOUR AGAINST THEIR RESPECTIVE MARKETS THEY'LL BE ABLE TO DO THAT AS WELL.

FABER: MEG, YOU'VE TALKED ABOUT FISCAL YEAR '15 MANY TIMES AS BEING A YEAR OF ACCELERATION IN THE PLAN THAT YOU PUT IN PLACE THREE PLUS YEARS AGO, SORT OF A FIVE-YEAR PLAN. IN YOUR EARNINGS CALL THIS MORNING, AND ASSOCIATED MATERIALS, YOU'VE INDICATED IT'S GOING TO BE A FLAT REVENUE YEAR IN FISCAL '15 VERSUS FISCAL '14. SOME CONSTANT CURRENCY HEADWINDS PERHAPS, BUT FLAT. WAS THAT A REASON THAT YOU'RE NOT GOING TO SEE THAT ACCELERATION, THAT YOU ARE NOW PULLING A LEVER OF THE SPLITUP?

WHITMAN: NO, IT WASN'T. YEAH, WE SAID THAT 2015 WE'D BE FLAT IN CONSTANT CURRENCY WITHOUT ENTERPRISE SERVICES, THE COMPANY WOULD ACTUALLY GROW. SO THE REVENUE GROWTH WAS NOT AT ISSUE HERE. REALLY IT WAS, WHAT'S THE BEST WAY TO SET THESE BUSINESSES UP TO COMPETE FOR THE LONG TERM? HOW DO THEY BECOME MORE FOCUSED COMPETITORS WITH A CUSTOMER FOCUS THAT IS UNIQUE TO THE MARKETS IN WHICH THEY SERVE? SO, WE ACTUALLY HAVE A PRETTY POSITIVE OUTLOOK FOR 2015, AND WE, YOU KNOW, THINK THESE COMPANIES CAN GROW AND BEYOND 2015, INTO 2016, AND 2017. SO THE REVENUE FLAT REVENUE IN 2015 WAS NOT PART OF THE EQUATION.

FABER: IT WAS NOT. SO IT WASN'T AS THOUGH OH MAN, WE'RE NOT GOING TO HIT THE ORIGINAL GOALS THAT I SET OUT YEARS AGO, THEREFORE WE'VE GOT TO DO SOMETHING ELSE?

WHITMAN: NO, NO. YOU KNOW, WE UNDERTAKE A STRATEGIC REVIEW OF THE COMPANY EVERY YEAR WITH THE BOARD OF DIRECTORS AND WE HAD SEEN THE MARKET CHANGE, WE HAD SEEN HOW MUCH STRONGER WE ARE, HOW MUCH STRONGER THE COMPANY IS, HOW OUR GO TO MARKET CAPABILITIES HAVE IMPROVED, OUR INNOVATION ENGINE. WE FELT LIKE THIS WAS THE RIGHT TIME TO TAKE ADVANTAGE OF SETTING UP, TOO, AS YOU POINT OUT, SCALE COMPANIES, BUT WHO WILL BE A LITTLE BIT MORE FOCUSED AND A LOT MORE NIMBLE.

FABER: MEG, SEPARATELY, BUT ALONG WITH TODAY'S ANNOUNCEMENT, YOU UPDATED US ON YOUR RESTRUCTURING EFFORTS, WHICH BEGAN IN 2012. UNDER THAT PLAN ORIGINALLY AT 36,000 TARGETED LAY-OFFS, YOU MOVED TO 45 TO 50. NOW TODAY, YOU'RE AT 55, ANOTHER 5,000 POTENTIAL LAY-OFFS AT HEWLETT-PACKARD. IS THERE GOING TO BE EVEN MORE FROM HERE? I WOULD THINK PARTICULARLY WHEN YOU HAVE YOU LEADING ONE COMPANY AND ANOTHER LEADER OF THE OTHER COMPANY FOCUSING ON THOSE EMPLOYMENT RANKS, IS THERE EVEN MORE LAY-OFFS TO COME BEYOND THIS ADDITIONAL 5,000 FOR HP?

WHITMAN: WELL, LET ME GIVE YOU THE CONTEXT OF THE RESHAPING OF THE WORKFORCE AT HP. AS YOU RECALL, WHAT WE'VE DONE OVER THE LAST THREE YEARS IS WE HAVE INVESTED IN I.T. SYSTEMS, WE HAVE REDESIGNED PROCESSES, WE HAVE CHANGED OUR GO-TO MARKET, WE HAVE FOCUSED OUR R&D WHILE WE HAVE AT THE SAME TIME, INCREASED R&D SPENDING. AND WHEN WE ARE NOW SEEING THE RESULTS OF THOSE I.T. INVESTMENTS IN THAT BUSINESS PROCESS RE-ENGINEERING AND THERE IS EVEN MORE OPPORTUNITY FOR EFFICIENCY. AND EFFICIENCY IS ANOTHER WATCH WORD FOR COMPANIES TODAY. WE LIVE IN A VERY COMPETITIVE MARKET. WE HAVE TO HAVE THE LEANEST, MOST EFFECTIVE ORGANIZATION THAT WE CAN HAVE. SO WHEN WE SEE OPPORTUNITIES, WE OBVIOUSLY NEED TO TAKE ADVANTAGE OF THEM. IT MAKES US STRONGER AND IT MAKES US A MORE COMPETITIVE COMPANY. SO, WE, I THINK FOR 2015 IN TERMS OF THIS RESTRUCTURING, WE ARE DONE. NOW WHEN YOU SPLIT COMPANIES APART, TYPICALLY, AND WE HAVE LOOKED AT ALL OF THE OTHER ONES THAT HAVE BEEN DONE, OFTEN THERE IS AGAIN REALIGNMENT OF THE WORKFORCE, BUT WE'LL SEE HOW IT GOES. WE'LL KNOW MORE. WE'RE GOING TO TAKE EACH BUSINESS NOW AND SAY, KNOWING WHAT WE KNOW NOW, WHAT'S THE COST STRUCTURE WE NEED? HOW DO WE WANT TO GO TO MARKET? HOW DO WE LEVERAGE THE SUPPLY CHAIN BETWEEN THE TWO? AND WE WILL BE MAKING SURE THAT WE SET THESE TWO COMPANIES UP TO WIN. IT'S ONE OF THOSE GREAT OPPORTUNITIES THAT YOU HAVE TO REALLY SAY, WHAT'S THE RIGHT COST STRUCTURE? THE RIGHT FOCUS FOR THESE TWO COMPANIES AS THEY GO OFF TO WIN IN THEIR OWN MARKETS.

FABER: WELL, IT SOUNDS TO ME, FROM THAT ANSWER, THAT CONCEIVABLY THERE ARE GOING TO BE MORE JOB CUTS TO COME FOR THESE TWO COMPANIES.

WHITMAN: WE HAVE TO ORGANIZE OURSELVES FOR THESE COMPANIES TO WIN IN THE MARKET. NOW, THE TRUTH IS, WE'RE A LOT MORE EFFICIENT THAN WE WERE, YOU KNOW, THREE YEARS AGO, AS YOU CAN SEE. BUT WE HAVE TO SET THESE COMPANIES UP TO WIN, THAT IS OUR MISSION.

FABER: YOU WERE ASKED ON THE CALL ABOUT DISSYNERGIES. TONY SAKANAGI, I BELIEVE, ASKING ABOUT, YOU KNOW, WHEN THE THOUGHT WAS TO SPLIT OFF PCs, YOU WERE TALKING ABOUT AS MUCH AS A BILLION DOLLARS IN DISSYNERGY THAT MIGHT HAVE ACCRUED TO THE COMBINED COMPANY. AND SO THE QUESTION IS, WHAT ABOUT ANY DISSYNERGIES NOW AS A RESULT OF AGREEMENTS BETWEEN THE TWO SIDES OF THESE BUSINESSES? AND, AS YOU SAY, THE GO-TO-MARKET POWER OF BRINGING A FULLER PORTFOLIO OF PRODUCTS TO YOUR CUSTOMERS? DO YOU LOSE ANY BUSINESS?

WHITMAN: SO HERE'S THE THESIS ON DISSYNERGIES. YOU'LL RECALL BACK IN 2011, WE WERE SPINNING OFF POTENTIALLY, IT WASN'T EVEN A DEFINITIVE, THE COMPANY WAS POTENTIALLY SPINNING OFF PCs, AND THE BIGGEST DISSYNERGY WAS THE BRAND BECAUSE PRINTING WAS STAYING WITH THE REMAINING COMPANY AND PCs WAS GOING OFF ON ITS OWN, SO THERE NEEDED TO BE A NEW BRAND FOR PCs. ANYONE WHO HAS BEEN A MARKETER KNOWS IT'S VERY COSTLY TO BUILD A NEW BRAND. THIS TIME WE ARE SEPARATING OUR PRINTING AND PERSONAL SYSTEMS BUSINESS, WHICH IS WHERE ALL OF OUR CONSUMER FACING BUSINESSES ARE, THEY WILL BE HP INC WITH THE BLUE LOGO. AND SO THEY WILL NOT HAVE TO BUILD A NEW BRAND. ON THE ENTERPRISE SIDE, IT'S GOING TO BE HEWLETT-PACKARD ENTERPRISE. SO WE TAKE ADVANTAGE OF THE HEWLETT-PACKARD BRAND THERE. SO THE GOOD NEWS IS, THAT'S ONE BIG DISSYNERGY THAT WE WON'T SEE. SUPPLY CHAIN WAS ANOTHER DISSYNERGY, NOT NEARLY AS BIG AS THE BRAND, BUT WE WILL MITIGATE THAT POTENTIAL BY HAVING A SUPPLY CHAIN AGREEMENT BETWEEN THESE TWO NEW COMPANIES. REVENUE DISSYNERGIES, THERE MAY BE SOME BECAUSE WE DID GET SOME BENEFIT FROM GOING WITH A FULL PORTFOLIO, BUT WE THINK THAT'S REALLY MANAGEABLE. I.T. HAS TO BE SPLIT, THAT WILL BE A ONE-TIME COST. BUT THIS WILL GIVE BOTH COMPANIES THE CHANCE TO HAVE A CLEAN SHEET I.T. ORGANIZATION THAT IS UNIQUELY SUITED FOR THEIR BUSINESS. SO, THERE WILL BE SOME DISSYNERGIES, BUT I WILL TELL YOU, THE TEAMS ARE PRETTY COMMITTED TO WORKING OFF THOSE DISSYNERGIES AS FAST AS HUMANLY POSSIBLE. SO I THINK IT'S A VERY DIFFERENT SITUATION THAN IT WAS IN AUGUST OF 2011.

FABER: MEG, YOU'RE OBVIOUSLY GOING WITH THE HEWLETT-PACKARD ENTERPRISES COMPANY, AS ITS CEO. A, WHY DID YOU CHOOSE HEWLETT-PACKARD ENTERPRISES? AND, B, WHY NOT GO WITH A NAME PERHAPS THAT'S A LITTLE BIT DIFFERENT ON THAT SIDE? I GET HP INC, KEEP THE BRANDING. BUT THIS IS A DIFFERENT SET OF CUSTOMERS, SO WHY DID YOU CHOOSE THAT SIDE TO GO WITH AS THE CEO AND ARE YOU REALLY GOING TO STICK WITH THAT NAME?

WHITMAN: YEAH, WE LOVE THAT NAME. HEWLETT-PACKARD ENTERPRISES AND HP INC, THEY BOTH HAVE THE STRENGTH OF THIS GREAT, ICONIC COMPANY THAT EVERYONE RECOGNIZES WORLDWIDE. EVERYONE LOVES HP, OUR CUSTOMERS FROM THE BEGINNING HAVE SAID WE WANT HEWLETT-PACKARD TO WIN. SO I THINK THAT WAS THE RIGHT DECISION. AND I DECIDED TO, WITH THE SUPPORT OF THE BOARD, GO TO HEWLETT-PACKARD ENTERPRISES BECAUSE I HAVE A PASSION FOR THE ENTERPRISE. I HAVE A PASSION FOR THE NEW THINGS THAT ARE HAPPENING IN CLOUD, BIG DATA, SECURITY, MOBILITY, AND CONVERGED INFRASTRUCTURE. AND WE ALSO HAD A FANTASTIC EXECUTIVE WHO HAS DEEP DOMAIN EXPERTISE IN THE PERSONAL SYSTEMS BUSINESS AND THE PRINTING BUSINESS OVER THE LAST COUPLE OF YEARS, DEON WEISSLER. SO, YOU ALWAYS LOOK AT THESE THINGS AND YOU SAY, WHERE ARE MY SKILLS BEST SUITED? WHAT IS THE BREADTH OF MANAGEMENT TALENT AND THE BOARD AND I, AND THE REST OF THE MANAGEMENT TEAM, BY THE WAY, FELT LIKE THIS WAS THE RIGHT ANSWER. AND, AGAIN, YES, I AM GOING WITH HEWLETT-PACKARD ENTERPRISES, BUT ALSO, AS YOU KNOW, I WILL BE THE NON-EXECUTIVE CHAIRMAN OF HP INC. SO I'LL MAKE SURE THAT COMPANY IS OFF TO A GOOD START AS WELL.

FABER: RIGHT. YOU WILL MAKE SURE TO EVEN OUT ALL OF THE RESOURCES AS THE CAPITAL STRUCTURES FOR BOTH COMPANIES GET SET. MEG, FINALLY, YOU HAVE BEEN IN THE JOB OVER THREE YEARS, AS I'VE SAID. YOU'VE TALKED TO ME OFTEN TIMES ON AIR ABOUT THE COMPLEXITY OF THIS ORGANIZATION. YOU KNOW, IS THIS A CONCLUSION, THEN, BASED ON YOUR DECISION TO SPLIT THE COMPANY AND THE BOARDS, THAT HP WAS SIMPLY TOO BIG AND COMPLEX TO EFFECTIVELY MANAGE?

WHITMAN: WELL I WOULDN'T SAY IT THAT WAY EXACTLY. WHAT I WOULD SAY IS THAT THESE TWO ENTITIES ARE BETTER SUITED TO COMPETE IN VERY RAPIDLY CHANGING MARKETS WITH TWO QUITE DIFFERENT CUSTOMER BASES, EVEN WITHIN THE ENTERPRISE. AND WE WILL BE TWO SIMPLER COMPANIES SIMPLY BY REDUCING SCALE. BUT I THINK THE MAJOR THING IS WE ARE STRONG NOW BECAUSE OF OUR TURNAROUND EFFORTS, WE'RE IN A POSITION TO UNDERTAKE THIS, AND BY THE WAY, IT'S AN ENORMOUS UNDERTAKING IN A WAY THAT I KNOW WE WON'T MISS A BEAT WITH CUSTOMERS. AND THAT WE WILL MAKE SURE THAT WE DO THIS IN A REALLY PLANNED AND THOUGHTFUL WAY. AND I THINK WE'VE SET UP TWO COMPANIES THAT CAN WIN IN THE FUTURE IN THEIR MARKETS AND THAT'S VERY EXCITING.

FABER: MEG WHITMAN, AS ALWAYS, VERY MUCH APPRECIATE YOUR WILLINGNESS TO COME ON AND TALK. MEG WHITMAN, CHAIRMAN AND CEO, AT LEAST FOR NOW, AND FOR PROBABLY ANOTHER YEAR OR SO, OF HEWLETT-PACKARD. MEG, THANK YOU.

WHITMAN: THANKS A LOT, DAVID. GREAT TO SEE YOU.

About CNBC:

With CNBC in the U.S., CNBC in Asia Pacific, CNBC in Europe, Middle East and Africa, CNBC World and CNBC HD , CNBC is the recognized world leader in business news and provides real-time financial market coverage and business information to approximately 371 million homes worldwide, including more than 100 million households in the United States and Canada. CNBC also provides daily business updates to 400 million households across China. The network's 15 live hours a day of business programming in North America (weekdays from 4:00 a.m. - 7:00 p.m. ET) is produced at CNBC's global headquarters in Englewood Cliffs, N.J., and includes reports from CNBC News bureaus worldwide. CNBC at night features a mix of new reality programming, CNBC's highly successful series produced exclusively for CNBC and a number of distinctive in-house documentaries.

CNBC also has a vast portfolio of digital products which deliver real-time financial market news and information across a variety of platforms. These include CNBC.com, the online destination for global business; CNBC PRO, the premium, integrated desktop/mobile service that provides real-time global market data and live access to CNBC global programming; and a suite of CNBC Mobile products including the CNBC Real-Time iPhone and iPad Apps.

Members of the media can receive more information about CNBC and its programming on the NBC Universal Media Village Web site at http://www.nbcumv.com/programming/cnbc.