HP Announces Plans to Lay off 27,000 in Next Two Years
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.
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Jane McEntegart is a writer, editor, and marketing communications professional with 17 years of experience in the technology industry. She has written about a wide range of technology topics, including smartphones, tablets, and game consoles. Her articles have been published in Tom's Guide, Tom's Hardware, MobileSyrup, and Edge Up.
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Osmin 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?Reply -
southernshark HP should sell the name and business to a chinese company and just get it over with.Reply
The writing is on the wall. -
RealBeast Sad, it was a great company once (sure the ink and toner were overpriced) but then they went and bought Compaq.Reply -
ap3x 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.Reply
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spyfish 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.Reply
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. -
GreaseMonkey_62 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.Reply