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

WHEN: Today, Wednesday, November 25th

WHERE: CNBC's "Squawk on the Street"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Hewlett Packard Enterprise 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=3000458806, http://video.cnbc.com/gallery/?video=3000459672 and http://video.cnbc.com/gallery/?video=3000459673.

All references must be sourced to CNBC.

DAVID FABER: LET'S GET TO CERTAINLY ONE OF THE TOP STORIES FROM LATE YESTERDAY. SHARES OF HP INC. IN THE RED THIS MORNING. WHILE HP ENTERPRISE, THAT STOCK IS UP MORE THAN 4%. THAT IS AFTER HEWLETT PACKARD REPORTED RESULTS YESTERDAY FOR THE LAST TIME AS A COMBINED COMPANY. WITH EARNINGS PER SHARE AND REVENUE FALLING SHORT OF MOST OF THE EXPECTATIONS OF THE ANALYSTS WHO FOLLOWED THE COMBINED COMPANY. NOW EARLIER THIS MONTH OF COURSE YOU KNOW THE COMPANY DID SPLIT INTO TWO SEPARATE ENTITIES. HP INC., THAT OF COURSE THE PERSONAL COMPUTER AND PRINTING BUSINESS, AND HP ENTERPRISE WHICH FOCUSES ON COMPUTER HARDWARE, SOFTWARE AND SERVICING THE NEEDS OF LARGE COMPANIES. HERE TO BREAK DOWN THE QUARTER AND WHAT WE CAN EXPECT TO SEE FROM BOTH COMPANIES GOING FORWARD IS MEG WHITMAN. SHE IS THE CEO OF HEWLETT PACKARD ENTERPRISE BUT DON'T FORGET ALSO THE CHAIRMAN OF HP INC. MEG, AS ALWAYS, APPRECIATE YOUR JOINING US THIS MORNING. AND SOME ARE SAYING A MIXED BAG OF COURSE WHEN THEY LOOK AT THE OVERALL QUARTER, THE LAST ONE AS A COMBINED COMPANY IN PARTICULAR AT HP INC. BUT GIVEN YOU'RE THE CEO OF HPE, I'LL START THERE. AND I'LL START WITH SORT OF ONE OF THE OVERRIDING QUESTIONS I THINK THAT MANY OF YOUR INVESTORS HAVE, WHICH IS SIMPLY, IN AN ERA OF CLOUD COMPUTING AND THE SERVICES THAT RUN THAT SERVICE, SO TO SPEAK, OR THE HARDWARE THAT RUNS THAT SERVICE, MANY SAY YOU ARE NOT AS WELL POSITIONED AS YOU COULD BE NOT SELLING ENOUGH INTO THAT GROWTH AREA. WHAT DO YOU SAY?

MEG WHITMAN: WELL, IT'S A GREAT QUESTION BECAUSE THE MARKET IS IN A LOT OF – IS UNDERGOING A LOT OF CHANGE RIGHT NOW. BUT I'M VERY EXCITED ABOUT OUR CLOUD STRATEGY. AND WHAT CUSTOMERS WANT IS THEY WANT TO KNOW WHERE THEY SHOULD PUT THEIR DIFFERENT APPLICATIONS. SO FOR EXAMPLE, CUSTOMERS SAY I'VE GOT 1500 APPLICATIONS. WHAT SHOULD BE IN THE PRIVATE CLOUD, WHICH GIVES YOU CONTROL ON YOUR OWN PREMISES. WHAT SHOULD BE IN A MANAGED PRIVATE CLOUD OR A VIRTUAL PRIVATE CLOUD, AND THEN WHAT APPLICATIONS SHOULD BE IN THE PUBLIC CLOUD? LIKE AZURE OR AWS. AND THEN, BY THE WAY, HOW DO I ORCHESTRATE AND AUTOMATE ALL OF THIS. AND SO OUR STRATEGY IS, WE'RE THE LEADER IN PRIVATE CLOUD. WE'RE AMONG THE LEADERS IN VIRTUAL PRIVATE CLOUD AND MANAGED PRIVATE CLOUD. WE MADE A CHANGE TO OUR PUBLIC CLOUD STRATEGY. WE USED TO HAVE OUR OWN PUBLIC CLOUD. YESTERDAY, WE ANNOUNCED THAT WE WERE PARTNERING WITH MICROSOFT AZURE TO PROVIDE THE PUBLIC CLOUD. AND THEN WE HAVE THIS GREAT CLOUD SYSTEM AUTOMATION THAT HELPS YOU ORCHESTRATE YOUR CLOUDS IN YOUR DATA CENTER. SO IF YOU THINK ABOUT WHERE THE MONEY IS SPENT TODAY, INTERESTINGLY, STILL ABOUT 85% OF THE SPEND IN TRADITIONAL I.T., MOST PEOPLE DON'T UNDERSTAND THAT. THE NEXT BIGGEST SEGMENT IS PRIVATE CLOUD. AND THE NEXT AFTER THAT IS PUBLIC CLOUD. AND PRIVATE AND PUBLIC CLOUD ARE GROWING AT ABOUT THE SAME RATE. SO WE ARE GOING RIGHT TO THE HEART OF WHAT OUR CUSTOMERS ARE ASKING. AND I FEEL REALLY GOOD ABOUT OUR STRATEGY AND EXCITED ABOUT THE PARTNERSHIP THAT WE ANNOUNCED YESTERDAY WITH MICROSOFT AZURE.

FABER: WHEN ARE WE GOING TO GET A LITTLE MORE INFORMATION ON THAT PARTNERSHIP OR WHAT YOUR EXPECTATIONS ARE FROM IT, MEG?

WHITMAN: YEAH. SO NEXT WEEK AT DISCOVER WE HAVE OUR BIGGEST CUSTOMER EVENT EVER. AND IT IS IN LONDON NEXT WEEK AND WE WILL GO INTO A LOT OF DEPTH ABOUT THE NATURE OF THE RELATIONSHIP AND HOW CUSTOMERS CAN INTERACT AND ACCELERATE THEIR JOURNEY TO A HYBRID CLOUD.

FABER: AS I SAID AT THE OUTSET IN INTRODUCING YOU OF COURSE, HP INC., PERHAPS THE FOCUS – OR MORE NEGATIVE FOCUS THIS MORNING. HPE, ACTUALLY BEING – THOSE RESULTS BEING APPLAUDED TO A CERTAIN EXTENT BY INVESTORS. ENTERPRISE SERVICES IN PARTICULAR, PEOPLE LOOKING AT AND SAYING THAT WAS BETTER THAN WE ANTICIPATED. GIVE US A SENSE AS TO WHAT YOUR EXPECTATIONS ARE. I KNOW STILL REVENUES WERE DOWN YEAR OVER YEAR IN CONSTANT CURRENCY. NONETHELESS, IT IS SEEN AS A POSITIVE BY MANY IN TERMS OF THE OVERALL DIRECTION.

WHITMAN: YEAH, SURE. WELL OVERALL, HEWLETT PACKARD ENTERPRISE IS OFF TO A GOOD START. AND REMEMBER WHAT WE SAID IS WE HAVE TO HAVE GROWTH IN ENTERPRISE GROUP WITH MODEST MARGIN EXPANSION. THEN WE NEED TO STABILIZE REVENUES IN ENTERPRISE SERVICES WITH QUITE SIGNIFICANT MARGIN EXPANSION. AND I THINK WHAT THE ANALYSTS SAW IS WE ARE DELIVERING ON THAT PLAN. IT WAS JUST NEGATIVE 2% GROWTH IN CONSTANT CURRENCY, WHICH IS NOT WHAT WE ASPIRE TO, BUT THAT HAS BEEN A BUSINESS THAT HAS BEEN IN DECLINE FOR A NUMBER OF YEARS. AND THEN ACTUALLY 8.2% OPERATING PROFIT, WHICH IS THE HIGHEST OPERATING PROFIT THAT WE HAVE SEEN IN FOUR YEARS. SO I THINK THE TURNAROUND IS WORKING IN ENTERPRISE SERVICES AND THE INVESTORS ARE STARTING TO SEE THAT. AND IT'S TAKEN LONGER, QUITE FRANKLY, THAN ENTERPRISE GROUP BECAUSE THAT'S A LONG LEAD TIME BUSINESS. THESE ARE LONG-TERM CONTRACTS. THE PEOPLE WE ARE TALKING TO TODAY AT ENTERPRISE SERVICE WE MAY NOT INK A DEAL FOR A YEAR. SO IT'S A LITTLE BIT SLOWER TO TURN THAT BUSINESS AROUND. BUT WE'RE FEELING PRETTY GOOD ABOUT WHERE ENTERPRISE SERVICES IS, ESPECIALLY AS WE TURN TO THESE FOUR GROWTH TRANSFORMATION AREAS THAT WE KNOW OUR CUSTOMERS ARE LOOKING FOR.

FABER: YEAH. THE IMPACT OF THE STRONG DOLLAR IS FELT AT YOUR COMPANY PERHAPS AS MUCH AS ANY OTHER OUT THERE. AND BY THAT I ACTUALLY ALSO AM REFERRING TO THE OLD HP, INCLUDING HP INC., WHICH ALSO IS COMPETING AGAINST, FOR EXAMPLE, JAPANESE COMPETITORS WHICH BENEFIT FROM A LOWER YEN. HOW IS THE COMPANY POSITIONED? I MEAN, WE ARE GOING TO CONSTANTLY SEE RESULTS FROM YOU THAT SAY WELL REVENUES WERE DOWN, BUT IN CONSTANT CURRENCY THEY WEREN'T DOWN. EVENTUALLY I WOULD THINK WE JUST HAVE TO DEAL WITH REALITY, DON'T WE? YOU KNOW, EITHER IT'S DOWN OR IT'S UP. AND MAYBE THE DOLLAR IS GOING TO STAY STRONG.

WHITMAN: YEAH. SO OUR BELIEF IS THE DOLLAR IS GOING TO STAY STRONG. AND SO WE HAVE TO CONTINUE TO IMPROVE THE PRODUCTIVITY, REDUCE COSTS, MAKE SURE THAT WE ARE FIT TO COMPETE IN WHAT I WOULD CALL THE NEW NORMAL FROM A CURRENCY PERSPECTIVE. I MEAN, MOST AMERICAN COMPANIES FOR THE LAST DECADE, DAVID, HAD A GREAT WIND AT THEIR BACK BECAUSE THE CURRENCY WAS WORKING IN OUR FAVOR. I THINK THE NEXT DECADE IS GOING TO BE A LITTLE BIT MORE PROBLEMATIC, IN THAT I THINK THE DOLLAR IS GOING TO REMAIN STRONG. SO WE'VE GOT – AND IT CANNOT BE THAT THESE COMPANIES ARE JUST LESS VALUABLE BECAUSE OF A DIFFERENT CURRENCY RATE. SO WE'RE WORKING UNDER THE ASSUMPTION THAT THIS IS THE NEW NORMAL. AND YOU HEARD DION WEISLER YESTERDAY TALK ABOUT TAKING MORE COST OUT AND BEING MORE COMPETITIVE BECAUSE HE'S GOT A DOUBLE-EDGE SWORD IN THAT THE EURO IS OBVIOUSLY WEAKENING VERSUS THE DOLLAR. SO IS THE YEN. AND SO THE JAPANESE, AS YOU POINT OUT, CAN PRICE AGGRESSIVELY. SO HE'S GOT TO TAKE OUT COST SO HE CAN BE IN FIGHTING SHAPE IN THE NEW WORLD ORDER OF A DIFFERENT CURRENCY LEVEL. SO THAT'S THE WAY WE'RE APPROACHING IT.

FABER: WELL GIVEN THAT YOU'RE CHAIRMAN OF THAT COMPANY, LET ME ASK A QUESTION ON THAT FRONT. I MEAN, IT WAS NOT A GOOD QUARTER. PRINTING DOWN 14%, PERSONAL SYSTEMS GROUP REVENUES DOWN 14%. TO THOSE WHO SAY, AND HAVE SAID MANY TIMES, IT'S THE END OF THE ERA. THERE'S A SEMINAL CHANGE IN THE WAY PEOPLE USE OR DON'T USE PCs, THEY'RE SIMPLY NOT GOING TO BUY AS MANY. FORGET ALL THIS TALK OF CYCLES. WHAT IS THE RESPONSE FROM YOUR VIEW AS CHAIR OF THAT COMPANY?

WHITMAN: YEAH. SO IT WAS A TOUGH PC MARKET, BUT HP INC. PERFORMED VERY WELL. GAINED SHARE IN VIRTUALLY EVERY CATEGORY. HAD THE HIGHEST ALL-TIME SHARE THEY'VE HAD IN THE COMMERCIAL PC SEGMENT FOR A LONG TIME, WHICH IS THE MORE PROFITABLE SEGMENT OF THAT BUSINESS. AND MICROSOFT WINDOWS 10 HAS NOT YET PROVIDED THE CATALYST TO PC UPGRADES THAT EVERYONE ANTICIPATES. IT'S STILL GETTING GREAT REVIEWS, BUT THE INTERESTING FACT IS THERE'S NEARLY 450 MILLION PCs OUT THERE THAT ARE OLDER THAN FOUR AND A HALF YEARS. AND AT SOME POINT, OUR BELIEF IS THAT PEOPLE ARE GOING TO UPGRADE THOSE PCs. AND I THINK HP INC. IS WELL POSITIONED WHEN THAT HAPPENS.

FABER: DO WE HAVE A SENSE THOUGH AS TO HOW MANY WILL ACTUALLY BE UPGRADED OR HOW MANY WILL SIMPLY NEVER BE REPLACED BECAUSE I'M HAPPY WITH THE PHONE OR THE IPAD OR WHATEVER OTHER DEVICE I'M USING?

WHITMAN: YEAH. I THINK IT'S HARD TO KNOW, BUT OUR BELIEF IS THAT THERE'S STILL MANY PEOPLE WHO DO REAL WORK AND PRODUCTIVITY, NOT JUST SURFING THE WEB. AND SO YOU KNOW, IF YOU ACTUALLY HAVE TO DO REAL WORK, AND IT'S PART OF YOUR EXISTENCE, THEN YOU ARE GOING TO END UP UPGRADING THAT PC. SO, YOU KNOW, I THINK THAT BUSINESS IS A CYCLICAL BUSINESS, ALWAYS HAS. AND MY VIEW IS, AND I THINK DION'S VIEW IS THAT THAT WILL REBOUND, YOU KNOW, OVER THE NEXT YEAR OR YEAR AND A HALF. SO, YOU KNOW, A TOUGH MARKET, BUT I HAVE TO SAY, HP INC. HAS DONE A REALLY NICE JOB COMPETING IN A DOWN MARKET.

FABER: AND THEY ARE ACCELERATING PERHAPS SOME LAYOFFS. ON THAT SUBJECT AS WELL OF COURSE, SINCE YOU TOOK OVER AS CEO OF THE OVERALL HEWLETT PACKARD, I THINK 59,000 JOBS, I THINK THAT ENDS UP BEING THE TOTAL NUMBER. BUT NOW, THERE'S ANOTHER 30,000 POTENTIALLY THAT YOU'RE LOOKING TO CUT AS WELL OVER THE NEXT, WHAT IS IT, TWO YEARS, I GUESS FROM THIS POINT. IS THAT CORRECT? AND IS THAT SORT OF THE NUMBER THAT YOU'RE STILL WORKING WITH?

WHITMAN: YEAH. THAT'S THE NUMBER WE ARE STILL WORKING WITH. AND WE HAVE TO GET OUR COST STRUCTURE IN LINE WITH THE REVENUE TRAJECTORY OF THE COMPANY. AND WE ALSO HAVE TO BE IN FIGHTING SHAPE TO COMPETE IN WHAT IS A REMARKABLY COMPETITIVE INDUSTRY. AND YOU CAN SEE THE RESULTS OF THAT IN ENTERPRISE GROUP. YOU KNOW, REALLY GREAT PERFORMANCE IN OUR ENTERPRISE GROUP, GREAT PERFORMANCE REALLY IN ES NOW, IT IS TURNING THE CORNER. AND EVEN SOFTWARE HAD A PRETTY GOOD QUARTER, FLAT GROWTH, WHICH IS AN IMPROVEMENT. SO WE'VE GOT TO BE COST COMPETITIVE. AND WHAT'S HAPPENING NOW IN THIS NEXT ROUND IS THAT WE WILL REDUCE THE WORK FORCE, BUT THEN WE HAVE TO HIRE IN LOWER COST LOCATIONS. AND SO WE'VE GOT TO REBALANCE THIS WORK FORCE AGAIN TO REMAIN COMPETITIVE, BECAUSE SO MANY OF OUR COMPETITORS HAVE MORE OF THEIR WORK FORCE IN OFF-SHORE LOCATIONS. SO WE NEED TO DO THAT AND WE'RE GOING TO CONSOLIDATE INTO FIVE MAJOR OFF-SHORE CENTERS. SO IT IS GOING TO MAKE US EVEN MORE COMPETITIVE. AND WHAT'S AMAZING ABOUT THIS IS WE HAVE TAKEN THE WORK FORCE DOWN BY THE AMOUNT THAT WE HAVE, YOU CITED IT 59,000, AND YET IN ENTERPRISE SERVICES, OUR NET PROMOTER SCORE, THAT MEASURE OF CUSTOMER LOYALTY, IS THE HIGHEST IN THE INDUSTRY TODAY. 54. AND THAT'S HIGHER THAN IBM, HIGHER THAN ATOS, HIGHER THAN TSYSTEMS, HIGHER THAN ACCENTURE. AND ULTIMATELY, THAT'S GOING TO BE AN IMPORTANT ADVANTAGE FOR US BECAUSE CUSTOMERS WANT LOW COST, BUT THEY WANT REALLY HIGH QUALITY BECAUSE THEY'RE ENTRUSTING WHETHER IT'S THEIR DESKTOP SERVICES OR I.T.O., OR WHATEVER HAPPENS TO BE THERE. AND ENTRUSTING IT TO HP.

FABER: RIGHT. AND FINALLY, YOU MENTIONED IT IN YOUR COMMENTS JUST NOW, TURNING THE CORNER. I THINK MANY INVESTORS HAVE BEEN WAITING FOR THAT DAY FOR A LONG TIME. I DON'T WANT TO TAKE AWAY FROM THE FACT THAT YOU DID HAVE REVENUE GROWTH AND CONSTANT CURRENCY. NONETHELESS, YOU'RE TALKING ABOUT A COMPANY WHOSE MARKET VALUE IS HALF OF THAT OF ITS REVENUES. SO THERE ARE NOT A LOT OF PEOPLE WHO FULLY BELIEVE YOU'RE TURNING THE CORNER IN THE SENSE OF REAL GROWTH. WHAT CAN YOU POINT OUT FROM THIS QUARTER THAT GIVES THEM OR GIVES YOU THE CONFIDENCE THAT THAT PHRASE THAT YOU USED, AND HAVE USED BEFORE MEG, IS REALLY GOING TO BE TRUE?

WHITMAN: YEAH. WELL, FOR HEWLETT PACKARD ENTERPRISE, THIS IS THE SECOND CONSECUTIVE QUARTER OF GROWTH IN CONSTANT CURRENCY. SO WE'VE GOT TWO QUARTERS UNDER OUR BELT. AND WE NEED TO CONTINUE TO DELIVER. WE HAVE EVERY CONFIDENCE THAT WE WILL GROW REVENUES FOR HEWLETT PACKARD ENTERPRISE IN 2016 IN CONSTANT CURRENCY. AND WE THINK THERE IS CONTIUNED MOMENTUM IN THE INFRASTRUCTURE BUSINESS. YOU SAW WHAT WE DID IN ENTERPRISE SERVICES. SO WE'VE GOT A LOT OF CONFIDENCE THAT WE'RE GOING TO BE ABLE TO GROW IN CONSTANT CURRENCY. BUT I THINK PEOPLE ARE SAYING OK, YOU'VE GOT TWO QUARTERS UNDER YOUR BELT, YOU KNOW, LET'S DELIVER A COUPLE MORE. AND THAT'S EXACTLY WHAT WE INTEND TO DO.

FABER: ALRIGHT. WELL, WE WILL LEAVE IT THERE FOR NOW. AS ALWAYS, MEG WHITMAN, VERY MUCH APPRECIATE YOU JOINING US. MEG WHITMAN IS THE CEO OF COURSE OF HEWLETT PACKARD ENTERPRISES, CHAIR OF HP INC. HAPPY THANKSGIVING TO HER AS WELL.

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