Sign in with
Sign up | Sign in

HP Announces Plans to Lay off 27,000 in Next Two Years

By - Source: HP | B 13 comments

HP today announced that it would lay off thousands of workers. The company today confirmed last week's rumors that it planned to cut between 8 and 10 percent of its workforce as part of a massive restructuring plan.

Late last week we heard whisperings that HP had a huge restructuring plan in the works, one that would see the company cut more than 20,000 people in order to reinvest. HP today announced its plans for a multi-year restructuring initiative that will see it axe 27,000 jobs.

HP will eat a $1.7 billion pre-tax charge in fiscal 2012 as a result of the restructuring, along with another $1.8 billion through 2014. However, the company says the new plan will generate annualized savings in the range of $3 to $3.5 billion (after 2014) and hopes the new plan will simplify business processes, boost innovation and deliver better results for employees, customers and shareholders. Approximately 27,000 employees will leave the company between now and the end of 2014. The restructuring plan will involve cash-saving reductions in other areas, including supply chain optimization and SKU and platform rationalization.

"These initiatives build upon our recent organizational realignment, and will further streamline our operations, improve our processes, and remove complexity from our business," Meg Whitman, HP president and chief executive officer, said in a prepared statement. "While some of these actions are difficult because they involve the loss of jobs, they are necessary to improve execution and to fund the long term health of the company. We are setting HP on a path to extend our global leadership and deliver the greatest value to customers and shareholders." 

So, with all those savings, HP's got some money to spend. What's it going to do with all that cash? Reinvest, mostly. The company plans to spread the money across all of its departments, providing extra dough for R&D for its Services, Software, and Enterprise Servers, Storage and Networking divisions.

Today's restructuring initiative is part of newly-appointed CEO Meg Whitman's overall plan to return the Silicon Valley company back into positive growth. PC sales are reportedly dropping due to consumer favoritism towards tablets. The company has also been slow to shift away from ITservices and focus on the current trend of cloud computing.

Follow @JaneMcEntegart on Twitter.           

Display all 13 comments.
This thread is closed for comments
  • 4 Hide
    Osmin , May 24, 2012 5:09 PM
    We need to move the factory jobs back to America to balance out the job losses. The middle class in America starts from $22,300.00 to $25,000 per year. The factory jobs that were plentiful in the past made a healthy middle class and created realistically low unemployment numbers. Nine out of ten products used to be made in America before the government opened the doors to foreign imports without tariffs and pushed for the global economy to make every American worker compete with the salaries of third world countries. We have fake unemployment numbers in order to push the global economy. Even the construction of the new Bay Bridge in San Francisco was contracted to a Chinese firm that brought Chinese workers to build the bridge for 75 cents an hour ($12 per day) and working 16 hours a day. We already lost so many jobs in payroll, medical billing, etc. to foreign contracts that now we have construction workers being out sourced too. What’s next to go?
  • 4 Hide
    freggo , May 24, 2012 5:31 PM
    Kill 27,000 jobs or export them to China or Korea ?
  • 3 Hide
    southernshark , May 24, 2012 5:36 PM
    HP should sell the name and business to a chinese company and just get it over with.

    The writing is on the wall.
  • 6 Hide
    RADIO_ACTIVE , May 24, 2012 5:57 PM
    What do you expect its Whitman, that bitch is the devil lol
  • 2 Hide
    RealBeast , May 24, 2012 6:00 PM
    Sad, it was a great company once (sure the ink and toner were overpriced) but then they went and bought Compaq.
  • -4 Hide
    ap3x , May 24, 2012 6:22 PM
    Payroll are most companies largest expense. Unfortunately it effects people the most. HP employs over 330,000 people. They have to do what they need to do for the business and then they will be able to eventually hire new people in parts of their business that they need manpower.

  • -3 Hide
    halcyon , May 24, 2012 7:45 PM
    Sheesh, is Apple the only US IT firm not firing folks left and right? /trolling
  • 1 Hide
    spyfish , May 25, 2012 8:02 AM
    For once this restructuring actually make sense. Today HP simply have to many project managers and bean counters. By merging two major Organization within HP, allot of redundant Project managers and metric gurus can removed.
    This does make sense to make the company more efficient. In the long run it might actually create more "ground floor" jobs.
    I believe there are no plans to remove customer facing jobs, R&D etc. And no plan to move jobs to china as indicated above.
  • 2 Hide
    stevenrix , May 25, 2012 12:13 PM
    It will be the average Joe that will get laid off because HP made bad investment.
  • -2 Hide
    GreaseMonkey_62 , May 25, 2012 2:10 PM
    Maybe they could save money by not packing all kinds of crap in with their boxes. We ordered a couple hundred computers for our organization from HP. There was so much extra junk, cables plastic pieces and screws that we threw out, because they were not needed. I understand it's nice to send parts in case a customer needs it, but it might not be a bad idea to find out before shipping, just what a customer needs.
  • 0 Hide
    Anonymous , May 27, 2012 4:32 AM
    Letter to the Meg Whitman, HP CEO
    From: George McCasland
    Date: Wed, May 23, 2012 at 6:33 PM
    Subject: Announced Layoffs
    To: Meg Whitman

    Dear Ms. Whitman,

    Dads House has free information that will be needed by many of those facing a layoff from your company.

    I would like to suggest that HP send out a notification to all those people being laid off that if they have a child support obligation, they can get help from their state to have the order modified. That they need to make the official request the moment they have been notified they are listed for release, as it can take up to a year to get a hearing.

    This is a right they have under the 1988 Child Support Enforcement Act, and is detailed in the Federal Child Support Enforcement Handbook for Non-Custodial Parents. Unfortunately, the states refuse to distribute the handbook, which is free from the feds. Here is the material from it.

    If you are willing, here is a small poster that can be displayed in the employee break rooms with the above link.

    I hope you will consider my request, and perhaps have one of your assitants respond to confirm you have received it. You are experiencing some public relations issues right now with this decision, and this might help it.

    George R. McCasland, National Moderator
    Dads House Educational Center & Groups

    Took me a while to find a contact address, and I cc'd it to their Craig Gomez, Media Relations VP, as a backup.
  • 0 Hide
    legacy7955 , May 29, 2012 8:40 PM
    If anything HP should bring manufacturing back to the USA, sure they may need to reduce the current staff because of overlapping BUT lets see some of that investment go back into US jobs in the form of other useful and needed positions. It certainly would be good PR and it would create a ripple effect which would have many more people in the USA buying HP.
  • 0 Hide
    halcyon , May 29, 2012 9:07 PM
    legacy7955If anything HP should bring manufacturing back to the USA, sure they may need to reduce the current staff because of overlapping BUT lets see some of that investment go back into US jobs in the form of other useful and needed positions. It certainly would be good PR and it would create a ripple effect which would have many more people in the USA buying HP.

    The question is can HP bring back manufacturing to the USA and make as much or more profit than they're currently making. They couldn't care less about jobs in the USA, that seems to be evidenced.