HP to let 16,000 employees go as revenues drop
Further 16,000 workers are expected to lose their jobs, in addition to the 34,000 dismissals Hewlett-Packard Co. previously announced. The downsizing efforts are part of a bigger attempt to reverse its losses and streamline the company. This could lead to extra billion dollars a year by 2016 on top of the anticipated maximum $4 billion savings.
The layoffs will come across all HP's product divisions and geographical locations. About 7,000 of the new layoffs will come before the end of HP's 2014 fiscal year and the rest before the end of 2015.
On a quarterly earnings call, HP chief executive Meg Whitman took a hammering from Wall Street analysts, clearly surprised by the magnitude of the numbers. Whitman announced her turnaround plan in May 2012 estimating layoffs of 27,000. The numbers were later boosted to 29,000, then 34,000 and now are estimated at a total 50,000
Analysts asked if Whitman had lost confidence in HP's ability to grow revenues.
"This has nothing to do with our confidence in business, it's about opportunities to make this company better," Whitman said. "I've done a number of turnarounds—not at this scale—but you see more opportunities the deeper you get in," she said.
Executives have been studying additional opportunities to streamline the company since last year, signalling along the way more layoffs could come, added HP's CFO.
Whitman noted HP has had three quarters of flat revenues after several quarters of revenue declines of 6 per cent to 9 per cent. "That's encouraging to me because you have to stabilise before you grow," she said.
Although HP's divisions might have their own layoff plans to deal with specific business issues in the future, "I do not anticipate another [corporate restructuring] programme after this," Whitman said.
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