CEO Meg Whitman told The Wall Street Journal
that she's "not at all disappointed" in having to lay off tens of
thousands of HP employees. "It's the natural course of what makes sense
in a turnaround of this size and scale," she said. She did acknowledge
"it is difficult for employees," but added that workers know HP can
Hewlett-Packard is again cutting jobs. On Thursday, the
company announced it would be eliminating 11,000 to 16,000 jobs -- on
top of earlier plans to cut 34,000 positions.
About $1 billion will be saved by the newly announced layoffs, on top of
the $3.5 billion to $4 billion in savings from the previous layoffs.
About 317,000 employees were on the payroll at end of 2013. The company
indicated the layoffs will be spread among countries and departments,
although it will continue to add R&D positions.
The move was presented by HP on Thursday along with its second-quarter
results. There was a 1 percent drop in quarterly earnings, the 11th
straight decline in quarterly sales. Earnings for the fiscal second
quarter ending April 30 were $1.3 billion, compared with $1.1 billion in
the same quarter last year. Sales were $27.3 billion, while Wall Street
projections had been $27.41 billion. Investors have generally reported
being pleased with HP's financial progress over the last two quarters.
PC Sales Up
CEO Meg Whitman told Reuters news service that the company would be looking to cut back in "areas not central to customer-facing and innovation agendas," and said R&D spending has been increased.
The layoffs are part of a restructuring under Whitman, as HP attempts to
re-orient itself in the face of changing market conditions. However,
PCs still represent the largest portion of the company's revenue,
bringing in $8.2 billion last quarter. PC sales rose 7 percent over the
previous quarter, thanks largely to sales to enterprises, but they also
have the lowest profit margin of the company's businesses.
Some analysts have suggested that this boost in PC sales may have been a
blip of upgrading, driven by Microsoft's ending of its support for
Windows XP. In order of revenue, the next lines of business are enterprise products, printers, enterprise services, and software.
'Not at All Disappointed'
Whitman told The Wall Street Journal that she's "not at all
disappointed" in having to lay off tens of thousands of employees. "It's
the natural course of what makes sense in a turnaround of this size and
scale,"
she told the publication. She did acknowledge "it is difficult for
employees," and added that workers know the company can be more
efficient.
The company also announced some executive changes. Executive Vice
President George Kadifa, head of software operations, will be replaced
by the head of the Autonomy analytics unit, Robert Youngjohns. Kadifa will now be in charge of software operations. Additionally, the head of the server business, Antonio Neri, will now run networking.
HP has also been announcing several low-end products. Earlier this week,
it released a 7-inch Android tablet priced at $99. While relatively
low-powered compared with higher-priced competitors, the model does
offer a basic tablet at a cheap price from a known brand. In June, the
company is expected to release its $200 Chromebox, employing Google's
Net-based Chrome operating system.
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