Hewlett-Packard to cut an additional 16,000 jobs
23 May 2014
US computer giant Hewlett-Packard announced Thursday it was cutting an additional 11,000 to 16,000 jobs as part of its restructuring plan.
The new cuts, which come on top of 34,000 job reductions planned under a programme started in 2012, were announced after HP revealed a slump in revenues (See: Hewlett-Packard to eliminate 30,000 or more jobs: report).
HP, until recently the world's largest technology company in terms of revenue, employed about 317,500 people globally at the end of 2013.
The PC maker has been battered by deep changes in both consumer and business behaviour and sales of personal computers, its largest area of business, have been hurt in recent years by competition from tablets and smart phones
The company reported overall revenue of $27.3 billion, down slightly from a year earlier, and net earnings of $1.3 billion, up from $1.1 billion.
Second quarter diluted net earnings per share (EPS) was $0.66, up from $0.55 in the prior-year period and within its previously provided outlook of $0.62 to $0.66.
Second quarter net revenue of $27.3 billion was down 1 per cent from the prior-year period and flat on a constant currency basis.
Effective beginning of its first quarter of fiscal 2014, HP implemented certain organisational changes to align its segment financial reporting more closely with its current business structure. These organisational changes include:
- Transferring the HP Exstream business from the commercial hardware business unit within the printing segment to the software segment;
- Transferring the personal systems trade and warranty support business from the technology services business unit within the enterprise group segment to the other business unit within the personal systems segment;
- Transferring the spare and replacement parts business supporting the personal systems and printing segments from the technology services business unit within the enterprise group segment to the other business unit within the personal systems segment and the commercial hardware business unit within the printing segment, respectively; and
- Transferring certain cloud-related incubation activities previously reported in corporate and unallocated costs and eliminations and in the enterprise group segment to the corporate investments segment.
The company also recently announced its own cloud computing initiative (HP to invest $1 bn in open source cloud technology), and a joint venture to sell cloud-optimised servers alongside Foxconn, a low-margin Chinese contract manufacturer, while its rival IBM ''completely gave up on the business by selling its low-end server business to China's Lenovo.
In addition, HP transferred certain intra-segment eliminations from the enterprise services segment and the enterprise group segment to corporate intersegment revenue eliminations.
HP said these changes had no impact on HP's previously reported consolidated net revenue, earnings from operations, net earnings or net earnings per share.
HP's stock fell about 3 per cent from the time the earnings were inadvertently released, shortly before the close of Thursday's trading, through after-hours trading.