HP cutting 27,000 jobs through fiscal year 2014, Q2 profit down 31%

By on May 23, 2012, 5:30 PM

As rumors last week alluded to, HP announced they would be cutting 27,000 jobs as part of a restructuring plan led by CEO Meg Whitman. The reduction will eliminate eight percent of the company’s total workforce by fiscal year 2014 at a pre-tax cost of roughly $1.7 billion in fiscal 2012 and an additional $1.8 billion through fiscal 2014.

HP is offering an early retirement plan although it’s unclear if it will be offered to all of those on the chopping block or select employees. HP says workforce reductions will vary by country based on local regulations and meetings with employee representatives.

In addition to the job cuts, the company is planning to reduce costs by streamlining supply chains, reducing the number of products they produce and simplifying business and marketing strategies. By fiscal year 2014, HP believes the restructuring will generate savings in the range of $3.0 to $3.5 billion annually. HP will take these savings and reinvest them into research and development to capitalize on market trends.

“These initiatives build upon our recent organizational realignment, and will further streamline our operations, improve our processes, and remove complexity from our business," said Whitman. "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.”

In addition to the cuts, HP reported second quarter results that saw revenue drop three percent from the same period last year to $30.7 billion. Net earnings for the quarter were $1.6 billion, down a whopping 31 percent year to year. Despite the drop, earnings topped Wall Street analysts' forecast of $0.91 per share, finishing at $0.98.

User Comments: 4

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Breech said:

Sad to see even more jobs lost but I think Meg is doing a great job for HP. Wish she was governing my state, perhaps we'd see some much needed "streamlining" rather than being driven over the edge by governor Moonbeam.

Guest said:

She would have helped turn this country around for the better hiring illegals and then beat them should they not perform their tasks correctly.

tonylukac said:

Why are they cutting jobs when they are profitable?

Guest said:

This entire article makes me sick. Lets look over these numbers again...quarterly figures float around 1.6 billion which puts a net profit at around 6.4 Billion for the year, apparently that's not enough money so they want to save an additional 3.0-3.5 Billion which puts their annual net profit at around 9.4-9.9 BILLION dollars.

Oh. So you can't streamline or set in place organizational re-alignment without SLASHING 27,000 jobs? This is what happens when a handful of people make more then a few thousand. Why don't you push for better products instead of pulling what you have. The higher-ups are quick to fire people, isn't it also your fault that the company is losing profit? Nah, lets fire the people that had nothing to do with our earnings...that should fix the numbers and put money back into Wall Street.

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