HP to wipe out 27,000 jobs by October 2014!
Hewlett-Packard (HP) CEO, Meg Whitman, will eliminate 27,000 jobs, or 8% of its 350,000 employees, by October of 2014, the largest payroll cut in HP’s 73-year history. HP will try to reduce the number of layoffs by offering early retirement packages. Investors were pleased and HP shares surged $1.97, over 27%, to $23.05/share.
Whitman’s plan calls for less bureaucracy so the company can respond more quickly to customer needs. She also wants to boost research and development to spur innovation.
HP, which is based in Palo Alto, Calif., has been struggling to sell more personal computers and printers; demand has softened as people spend more time surfing the Web on phones and tablets such as Apple Inc.’s iPad. And the company’s efforts to sell more business software and consulting services have been stymied by competition from the likes of IBM Corp. and Oracle Corp.
Good luck with reducing the bureaucracy, Meg! Bureaucracy results from cloning certain personality types in corporations.
The company earned $1.6 billion, or 80 cents per share, in February through April. That’s 31 percent less than the $2.3 billion, or $1.05 per share, it earned a year earlier.
Excluding one-time items, the company said it earned 98 cents per share. That topped the average estimate of 91 cents per share among analysts surveyed by FactSet.
Revenue fell 3 percent to $30.7 billion, but that was about $800 million above analysts’ average projection.
To pay for severance and other restructuring costs, HP expects to take a pre-tax charge of about $1.7 billion in the current fiscal year, which ends in October. About $1 billon of those charges will come in the current quarter, which ends in July. HP expects to record $1.8 billion more in charges through fiscal 2014.
The company also expects to register a charge of $1.2 billion to account for the declining value of the Compaq computer brand. HP bought Compaq a decade ago in a deal that many shareholders, including the son of a company founder William Hewlett, tried to block.
-Bill at
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