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

WHEN: Today, Wednesday, September 16th

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" (M-F, 9AM-11AM ET) today. Following are links to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000421327 and http://video.cnbc.com/gallery/?video=3000421328.

All references must be sourced to CNBC.

DAVID FABER: HEWLETT-PACKARD MAKING NEWS AT THE ANALYST MEETING YESTERDAY THAT TOOK PLACE YESTERDAY SAYING IT WOULD SLASH UP TO 30,000 MORE JOBS AS THE COMPANY SEEKS TO CUT $2.7 BILLION IN COSTS. THAT WORK FORCE REDUCTION IS IN ADDITION TO PREVIOUSLY ANNOUNCED JOB CUTS THAT HAVE AMOUNTED TO ABOUT 55,000 OVER THE LAST FEW YEARS. HERE TO GIVE US A LOT MORE DETAILS ON HOW THE COMPANY PLANS TO RESTRUCTURE AND WHAT TO EXPECT IN THE FUTURE, FOLLOWING THE SPLIT THAT'S LESS THAN TWO MONTHS AWAY IS CHAIRMAN AND CEO MEG WHITMAN. ALWAYS A PLEASURE TO HAVE YOU. EARLY IN THE MORNING. I WOULD LOVE TO START WITH THE JOB CUTS, OF COURSE WHICH ARE GETTING SIGNIFICANT HEADLINES ACROSS THE COUNTRY. WHY THE NEED TO CUT ANOTHER 30,000 JOBS FROM HP ENTERPRISES THE COMPANY YOU WILL BE CEO OF ONCE THE SPLIT TAKES PLACE?

MEG WHITMAN: SURE YESTERDAY WE GOT A CHANCE TO LAY OUT FOR THE FIRST TIME THE STRATEGY OF THE TWO NEW COMPANIES. HEWLETT PACKARD ENTERPRISE AND HP INC. I THINK PEOPLE GENERALLY SPEAKING WERE PLEASED WITH THE STRATEGY AND THE OVERALL STORY FOR THE TWO COMPANIES. BUT YOU'RE RIGHT, ON HEWLETT-PACKARD ENTERPRISE WE HAVE ONE MORE RESTRUCTURING THAT WE NEED TO DO, AND IN PART THAT'S BECAUSE THE MARKET IS CHANGING SO FAST IN TECHNOLOGY. IT'S REMARKABLE WHAT'S HAPPENING TO OUR SERVICES BUSINESS AS NEW TECHNOLOGIES COME IN, WE HAVE TO RESTRUCTURE THAT LABOR FORCE TO LOW-COST LOCATIONS AND MUCH MORE AUTOMATION THAN WE HAVE TODAY. AND A STRONG ENTERPRISE SERVICES IS IMPORTANT TO HEWLETT-PACKARD ENTERPRISE STRATEGY BECAUSE WE ARE PIVOTING TO MORE SOLUTIONS-LED SELLING AROUND THE NEEDS THAT OUR CUSTOMERS HAVE MOST, IN TERMS OF FOR EXAMPLE TRANSFORMATION TO A HYBRID INFRASTRUCTURE OR CLOUD ENVIRONMENT. SO WE'RE EXCITED ABOUT THE FUTURE THESE CUTS ARE NEVER EASY BUT IT'S THE RIGHT THING TO DO BECAUSE WE HAVE TO NOW GET TO THE NEXT PHASE OF THE HP JOURNEY. IF YOU THINK ABOUT THE CUTS OVER THE LAST FOUR YEARS THEY WERE MOSTLY TO HELP US GET A COST STRUCTURE THAT WAS IN LINE WITH THE REVENUE TRAJECTORY. WE'RE NOW SAYING THAT REVENUES WILL GROW NEXT YEAR IN COST AND CURRENCY. SO THIS NOW CAN BE ABOUT MARGIN EXPANSION. THAT'S NOW GOT TO BE PART OF THE STORY.

FABER: RIGHT. I HEARD YOU SAY IT, THE NEXT PHASE OF THE HP JOURNEY. USUALLY WE START OFF MANY INTERVIEWS WITH THIS QUESTION. WILL THAT ACTUALLY INVOLVE GROWTH --

WHITMAN: YES.

FABER: IF THE CURRENCY WE ASSUME STAYS WHERE IT IS NOW.

WHITMAN: YES WHAT WE SAID FOR HEWLETT-PACKARD ENTERPRISE IS THERE WILL BE GROWTH NEXT YEAR IN CONSTANT CURRENCY. WE FEEL VERY CONFIDENT ABOUT THAT BECAUSE WE HAVE AN INCREDIBLE INNOVATION PIPELINE IN ENTERPRISE GROUP, ENTERPRISE SERVICES WE SAID WOULD BE DOWN NEGATIVE 2% TO FLAT IN CONSTANT CURRENCY. BY THE WAY, ENTERPRISE GROUP HAS REALLY STAGED A REMARKABLE TURNAROUND IN THE LAST THREE YEARS. THEY GREW ACTUALLY 9% IN CONSTANT CURRENCY IN THE THIRD QUARTER, WHICH IS PROBABLY THE FASTEST GROWTH RATE IN AT LEAST THE LAST FOUR, FIVE YEARS. WE'RE OPTIMISTIC ABOUT THE GROWTH.

FABER: YOU KNOW, TO BE FAIR, MEG, I THINK WE'VE DONE INTERVIEW NOW FOR THE LAST FOUR YEARS. I THINK AT THE OUTSET YOU ANTICIPATED THAT THERE WOULD BE GROWTH PRIOR TO THIS. I DON'T WANT TO TAKE AWAY FROM THE ACCOMPLISHMENTS THE COMPANY HAS SEEN OVER THE LAST FEW YEARS BRINGING IT BACK TO MORE OR LESS EVEN, BUT YOU NEVER QUITE GOT THERE IN GROWTH WHAT GIVES YOU THE CONFIDENCE YOU'LL BE RIGHT THIS TIME?

WHITMAN: FIRST OF ALL, I THINK SEPARATING THESE TWO COMPANIES IS THE EXACTLY THE RIGHT THING TO DO. ONE OF THE THINGS THAT CAME THROUGH, I THINK YESTERDAY, WAS THAT, YOU KNOW, IT'S AMAZING -- THESE ARE TWO ENTIRELY DIFFERENT BUSINESSES. HEWLETT-PACKARD ENTERPRISE IS SOLUTIONS LED, ENTERPRISE SELLING. HP INC IS A FANTASTIC VOLUME BUSINESS. SIX PCS A SECOND, ONE PRINTER A SECOND. THEY'RE ENTIRELY DIFFERENT BUSINESS AND AS YOU KNOW, THE PC BUSINESS AND THE PRINTING BUSINESS HAS BEEN VERY VOLATILE OVER THE LAST FOUR YEARS. SO I THINK THE FOCUS, THE COMPETITIVE SHARPNESS, THE ABILITY TO HAVE THE RIGHT CAPITAL STRUCTURE FOR THESE TWO COMPANIES WILL HELP QUITE A BIT. LISTEN, TECHNOLOGY HAS BEEN -- OUR INDUSTRY GOES THROUGH THESE BIG TECTONIC PLATE SHIFTS EVERY 10, 15 YEARS. THE LAST 5 YEARS HAS BEEN NO EXCEPTION. IT'S HARD TO FORECAST IN MARKETS THAT ARE AS CHANGING AS FAST AS OURS. I THINK WE HAVE A GOOD HANDLE ON THIS NOW. LISTEN YOU NEVER SAY NEVER. THE ECONOMY CAN FALL OUT OF BED. ANYTHING COULD HAPPEN. BUT WE FEEL REALLY GOOD ABOUT OUR PRODUCT LINEUP, OUR SERVICES LINEUP, OUR GO TO MARKET STRENGTHS WHICH I THINK WILL STAND US IN GOOD STEAD FOR FY 16.

FABER: THAT'S FUNNY. GIVE WE HAVE YOU HERE OF COURSE. THE GLOBAL ECONOMY CERTAINLY A CONCERN TO MANY INVESTORS, WHETHER IT BE CHINA OR EUROPE. 65% OF YOUR SALES ARE OUTSIDE THE U.S. WHAT ARE YOU SEEING RIGHT NOW WHEN IT COMES TO CHINA RIGHT NOW, MEG, AND THEN EUROPE?

WHITMAN: CHINA IS A -- IT'S A SLOWING ECONOMY FROM WHAT WE CAN TELL. WHAT I WILL SAY IS WE'RE DOING QUITE WELL IN CHINA NOW. YOU RECALL WE ANNOUNCED A JOINT VENTURE FOR OUR ENTERPRISE BUSINESS WITH XINHUA IN CHINA AND SO ACTUALLY OUR SERVER BUSINESS IS DOING QUITE WELL THERE. OUR NETWORKING BUSINESS IS IN A RESURGENCE. BUT THE ECONOMY IS TOUGH THERE RIGHT NOW. THERE IS NO QUESTION ABOUT IT. THE OTHER HOT SPOT IS RUSSIA. HP HAS AN EXPOSURE TO RUSSIA. WE HAVE A VERY BIG RUSSIA BUSINESS BETWEEN HP INC AND WHAT WILL BECOME HEWLETT-PACKARD ENTERPRISES AND THAT'S A TOUGH MARKET. EUROPE IS JUST UP AND DOWN. SOME QUARTERS YOU FEEL QUITE BULLISH ABOUT WHAT'S HAPPENING IN EUROPE, THEN YOU TAKE A STEP BACK. I WILL SAY I THINK THE STRONGEST ECONOMY IN EUROPE AT LEAST FROM OUR PERSPECTIVE IS THE UK. THE AUSTERITY WORK, NOW COMING OUT OF THAT, I THINK DAVID CAMERON AND HIS GOVERNMENT HAVE DONE A REMARKABLE JOB ON SETTING THAT ECONOMY ON THE RIGHT FOOT SO WE ARE QUITE BULLISH ABOUT THE UK RIGHT NOW.

FABER: JIM HAS A QUESTION.

JIM CRAMER: JIM CRAMER HERE.

WHITMAN: HEY.

CRAMER: WHEN I LOOKED AT THE ANALYSTS, I CAME BACK AND I SAID YOU KNOW WHAT ENTERPRISES WHICH WAS A GROUP I WAS VERY EXCITED ABOUT SEEMS LIKE IT IS KIND OF OKAY, KIND OF THE SAME AS WHEN WE TALKED TO YOU LAST. I WAS SURPRISED THAT HP LOOKS LIKE IT WILL BE VALUED AT LEVEL THAT'S SO DRAMATICALLY LOWER THAN ANY OTHER HARDWARE COMPANY THAT I'M ATTRACTED TO, PARTICULARLY WITH WHAT YOU'RE GIVING IS A PRETTY GOOD BALANCE SHEET. CAN YOU SPEAK TO THE IDEA THAT MAYBE HP IS NOT AS BAD AS WE THOUGHT IT WAS ABOUT A YEAR AGO?

WHITMAN: WELL, LISTEN, I THINK ONE OF THE UNDERLYING THESIS OF THIS SPLIT WAS FIRST OF ALL WE'LL BE MORE FOCUSED ON THE BUSINESSES, BUT EACH COMPANY OUGHT TO TRADE AT A SLIGHTLY HIGHER MULTIPLE AT LEAST OVER TIME WHEN WE CONTINUE TO EXECUTE. BECAUSE THE COMPETITORS FOR BOTH THE HEWLETT-PACKARD ENTERPRISE WHICH IS THE SOLUTIONS LED ENTERPRISE BUSINESS TRADES -- THE CONGLOMERATE DISCOUNT IS ACTUALLY PRETTY SIGNIFICANT. WHEN YOU TAKE HP INC, THE PC AND PRINTING COMPANY, WHEN YOU LOOK AT XEROX OR LEXMARK OR OTHERS, THEY TRADE AT HIGHER MULTIPLES. SO MY VIEW ACTUALLY IS THIS WILL CREATE SHAREHOLDER VALUE. EITHER RIGHT AT THE TIME OF THE SPLIT OR A FEWMAYBE WITHIN A MONTHS AFTER THAT. BUT WE OBVIOUSLY HAVE TO EXECUTE. THE MARKETS HAVE TO COOPERATE. WE HAVE TO DO OUR JOBS. I THINK WE'RE EXCITED ABOUT THE POSSIBILITY AND THE POTENTIAL FOR VALUE CREATION FOR SHAREHOLDERS.

CARL QUINTANILLA: HEY MEG, FORTUNE QUOTED YOU ABOUT – THEY ASKED YOU WHAT YOUR POINT OF PRIDE WAS SO FAR. AND THEIR QUOTE WAS WE HAVEN'T DONE ANYTHING STUPID IN THE LAST FOUR YEARS. I WONDER IS THAT THE STANDARD BY WHICH YOU THINK YOU SHOULD BE JUDGED?

WHITMAN: OK, SO THAT WAS A MISQUOTE BECAUSE THE QUESTION THAT WAS ASKED TO ME WAS ARE YOU GOING TO MAKE A LARGE HIGH MULTIPLE ACQUISITION. AND I SAID, LISTEN, WE HAVEN'T DONE ANY STUPID THINGS IN – ANYTHING STUPID IN THE LAST FOUR YEARS, I DOUBT WE ARE GOING TO DO SOMETHING IN THAT REALM THAT IS STUPID IN THE NEXT FOUR YEARS. SO THAT WAS VERY SPECIFICALLY ABOUT BIG ACQUISITIONS. AND YOU KNOW, THERE IS OBVIOUSLY A HANGOVER ON HP IN THAT REGARD. NO, THE THING I'M PROUDEST ABOUT IS ACTUALLY REIGNITING THE INNOVATION ENGINE AT HP. THAT IS WHO WE ARE AS A COMPANY. THAT IS THE LEGACY OF THIS COMPANY. AND YOU LOOK AT OUR INNOVATION PIPELINE AND ENTERPRISE GROUP, STRATEGIC ENTERPRISE SERVICES, WE'RE THE SECOND LARGEST SECURITY COMPANY IN THE WORLD. VERY FEW PEOPLE KNOW THAT, BUT WE HAVE 5,000 SECURITY PROFESSIONALS THAT STEP INTO VERY DIFFICULT SITUATIONS EVERY DAY. ON THE HP INC. SIDE, WE HAVE SPROUT, WHICH IS OUR IMMERSIVE COMPUTING OFFERING, WE'VE GOT SOME GREAT THIN AND LIGHT LAPTOPS AND THEN OF COURSE, THE FUTURE PROMISE ON 3-D PRINT, WHICH WE REALLY WEREN'T DOING MUCH ON FOUR YEARS AGO. SO I THINK THE THING I'M PROUDEST ABOUT IS THE INNOVATION ENGINE THAT WE HAVE REIGNITED HERE AND THE FACT THAT WE REESTABLISHED TRUST WITH CUSTOMERS AND PARTNERS.

CRAMER: MEG, YOUR FREE CASH FLOW IS BOUNTIFUL, MAYBE A LITTLE LESS THAN WHAT SOME ANALYSTS WERE EXPECTING. I NEED TO HEAR SOMETHING ABOUT DIVIDENDS. I JUST NEED TO HEAR SOMETHING ABOUT CASH BACK. I TOTALLY UNDERSTAND THE GROWTH STRATEGIES, BUT ARE THESE THINGS SOMETHING THAT A RETAIL INVESTOR MIGHT WANT? BECAUSE WHILE YOU'RE WAITING FOR THE COMPANIES TO GROW, YOU ARE GOING TO GIVE THEM GOOD DIVIDENDS.

WHITMAN: YES, SO WHAT WE SAID WHEN WE ANNOUNCED THE SPLIT IS THE DIVIDENDS OF THE TWO COMPANIES WOULD BE EQUAL TO OR GREATER THAN THE DIVIDEND OF THE COMPANY AS A WHOLE TODAY. AND THAT IS WHAT WE SAID YESTERDAY. OBVIOUSLY, THE HIGHER DIVIDEND YIELD COMPANY WILL BE HP INC. BECAUSE OF THE CASH FLOW FROM OUR PRINTING BUSINESS. AND THEY ANNOUNCED YESTERDAY THAT THEY WOULD RETURN CASH TO SHAREHOLDERS BETWEEN 50% TO 70% OF FREE CASH FLOW AND A VERY HEALTHY DIVIDEND. HEWLETT-PACKARD ENTERPRISE WILL HAVE ABOUT $400 MILLION IN DIVIDENDS. SO BOTH OF THESE COMPANIES WILL RETURN CASH TO SHAREHOLDERS IN THE FORM OF DIVIDENDS AND SHARE REPURCHASE.

FABER: MEG, ONE OF YOUR FREQUENT CRITICS HAS BEEN JIM CHANOS, THE NOTED SHORT SELLER. HE WAS GUEST LAST WEEK ON "SQUAWK BOX." HE AS YOU MIGHT IMAGINE REBUTS SOME OF THE ASSERTIONS YOU'RE MAKING. I'D LIKE YOU TO LISTEN TO WHAT HE HAD TO SAY LAST WEEK, AND THEN RESPOND.

WHITMAN: OKAY.

SOUND FROM JIM CHANOS: HEWLETT-PACKARD'S BASICALLY A BACKWARDS LOOKING COMPANY.

ANDREW ROSS SORKIN: EVEN WITH THE NEW BREAKOFFS?

JIM CHANOS: THE BREAKOFF IS FINANCIAL ENGINEERING. IT'S MORE OF THE SAME. IT'S MORE OF THE SAME NONSENSE. TELL ME NEW PRODUCTS THAT HEWLETT'S GOT THAT PEOPLE ARE EXCITED ABOUT. CYBERSECURITY? NO. 3-D PRINTING THEY WERE SUPPOSED TO DO? I MEAN, ALL THESE THINGS THAT KEEP GETTING LAUNCHED UP IN SILICON VALLEY, HEWLETT-PACKARD MISSES.

FABER: MEG?

WHITMAN: SO, I JUST THINK HE'S WRONG ON THAT DIMENSION. THIS SPLIT IS NOT FINANCIAL ENGINEERING. THERE MAY BE VALUE TO SHAREHOLDERS EMBEDDED IN THAT, BUT THIS IS ABOUT FOCUS AND ABOUT BEING ON TOP OF CUSTOMER NEEDS AND DEFINING THE FUTURE. LISTEN, WE HAVE ANNOUNCED A 3-D PRINTING TECHNOLOGY THAT IS TEN TIMES AS FAST, HIGHER QUALITY, BETTER COST AND THAT PRODUCT COMES OUT IN '16. ON THE ENTERPRISE GROUP SIDE, WE'RE LEADING IN ALL FLASH ARAY WE HAVE OUR NEXT GENERATION OF SERVERS. GOT ARUBA, AND OUR WIRED WIRELESS NETWORKING PRODUCT. SO I ACTUALLY DISAGREE WITH HIM. I THINK WE'VE DONE A REMARKABLE JOB OF REIGNITING THIS INNOVATION ENGINE AND BRINGING THINGS TO MARKET THAT CUSTOMERS REALLY WANT. YOU CAN SEE THE EVIDENCE IN OUR RESULTS. WHILE REVENUE IS STILL SHRINKING SLIGHTLY, THIS IS A BIG CHANGE FROM FOUR YEARS AGO WHERE IT WAS CLOSE TO HIGH SINGLE DIGITS SHRINKING IN REVENUE. AND FRANKLY OBVIOUSLY, IF WE HAD NOT HAD THE FOREIGN CURRENCY IMPACT, WE WOULD BE DOING EVEN BETTER. SO LISTEN, THESE BIG TURNAROUNDS TAKE TIME. MY VIEW IS THAT SEPARATING THESE TWO COMPANIES WILL BE THE RIGHT THING FOR SHAREHOLDERS AND THE RIGHT THING FOR CUSTOMERS. AND, YOU KNOW, I THINK HP IN MANY RESPECTS IS BACK AND BACK IN A REALLY HEALTHY AND GOOD WAY FOR SILICON VALLEY.

FABER: FINALLY, MEG, IN RETROSPECT, YOU HAD NOTHING TO DO WITH THIS DECISION, BUT IT IS AN ISSUE IN THE PRESIDENTIAL CAMPAIGN. WAS THE COMPAQ MERGER A MISTAKE?

WHITMAN: LISTEN, WHAT THE COMPAQ MERGER DID IS GAVE US A BIGGER POSITION IN PCs AND A BIGGER POSITION IN SERVERS. IT WAS VERY CONTROVERSIAL AT THE TIME. I'M NOT INTIMATELY FAMILIAR WITH EXACTLY WHAT HAPPENED THERE, BUT I'M ACTUALLY VERY PLEASED BY OUR POSITION IN SERVERS. WE HAVE A GREAT FRANCHISE IN PCs. YOU NEVER KNOW ABOUT THESE THINGS. MY VIEW IS, SOMEONE SAID EARLIER ON YOUR PROGRAM THAT ACQUISITIONS HAVE BEEN A FAILURE AT HP AND THERE HAVE CERTAINLY BEEN SOME PROBLEMATIC ONES, BUT THERE'S BEEN SOME GOOD ONES AS WELL. 3COM, 3PAR, A NUMBER OF OUR SOFTWARE ACQUISITIONS. ARUBA I THINK IS GOING TO BE A BIG SUCCESS. SO IT'S A MIXED BAG, BUT I HAVE TO SAY, I DON'T THINK IT IS QUITE FAIR TO SAY EVERY ACQUISITION WAS A PROBLEM BECAUSE THERE'S BEEN SOME VERY GOOD ONES THAT WERE MADE IN THE LAST FIVE YEARS.

FABER: NO, THAT'S TRUE. BUT THAT WAS A COMPANY-DEFINING DEAL. THAT WAS NOT A SMALLER ONE OR A TUCK IN. I MEAN, THAT WAS SOMETHING THAT DEFINED THE FUTURE OF THE COMPANY PERHAPS.

WHITMAN: ABSOLUTELY.

FABER: ENDING WITH NOVEMBER 1st, WHEN THE SPLIT WILL TAKE PLACE. AND ACTUALLY, MEG IS GOING TO JOIN US. MEG WHITMAN WILL JOIN US RIGHT HERE I THINK ON NOVEMBER 2nd.

WHITMAN: I WILL.

FABER: WHEN THE OPENING BELL RINGS. WE WILL SEE YOU THEN, MEG. THANK YOU VERY MUCH FOR JOINING US THIS MORNING. WE APPRECIATE IT.

WHITMAN: ALL RIGHT. THANK YOU VERY MUCH.

FABER: MEG WHITMAN, CHAIRMAN AND CEO OF HEWLETT-PACKARD, STILL ONE COMPANY RIGHT NOW.

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