Business

Largest in Company’s History: HP Prepares to Cut 27,000 Jobs

SAN FRANCISCO (AP/The Blaze) — Hewlett-Packard Co. plans to cut 27,000 jobs as the growing popularity of smartphones, the iPad and other mobile devices makes it tougher for the company to sell personal computers.

The cuts announced Wednesday represent HP’s largest payroll purge in its 73-year history. The reductions will affect about 8 percent of HP’s nearly 350,000 employees by the time the overhaul is completed in October 2014.

Word of the mass layoff had leaked out in media reports late last week, so the news didn’t come as a surprise.

HP hopes to avoid as many layoffs as possible by offering early retirement packages.

The company, which is based in Palo Alto, Calif., expects to save as much as $3.5 billion annually from the job cuts and other austerity measures.

HP CEO Meg Whitman plans to funnel most of the savings into developing more products and services that could help the company adapt to technological shifts. Those changes are driving demand for more mobile computing and for software that is provided over high-speed Internet connections, rather than installed on individual computers.

Largest in Companys History: HP Prepares to Cut 27,000 JobsHewlett Packard CEO and President Meg Whitman

Investors seemed to be delighted with the shake-up. HP’s shares surged $2.42, or more than 11 percent, to $23.50 in extended trading Wednesday after the announcement.

“Work force reductions are never easy,” Whitman said in a conference call Wednesday with analysts. “They adversely impact people’s lives, but in this case, they are absolutely critical to the long-term health of the company. Our goal is simple: a better outcome for the customers at reduced cost for HP.”

Whitman‘s crackdown will immediately change the leaders within HP’s recently acquired Autonomy division, which makes software for searching for information within companies and government agencies.

Bill Veghte, HP’s chief strategy officer, is replacing Autonomy founder Mike Lynch in an effort to boost the division’s financial performance. The shake-up is likely to amplify investor questions about whether HP blundered last year when it paid $11 billion to buy Autonomy. That deal was announced in August by Whitman’s predecessor, Leo Apotheker, just a month before he was fired.

News of the cutbacks overshadowed the release of HP’s latest quarterly results.

The company earned $1.6 billion, or 80 cent per share, during the three months ending in April, its fiscal second quarter. That represented a 31 percent decline from $2.3 billion, or $1.05 per share, at the same time last year.

If not for several items unrelated to HP’s ongoing business, the company said it would have earned 98 cents per share. That figure topped the average estimate of 91 cents per share among analysts surveyed by FactSet.

Largest in Companys History: HP Prepares to Cut 27,000 JobsThe Hewlett Packard logo in Frisco, Texas. Hewlett-Packard said Wednesday, May 23, 2012 that it’s laying off 27,000 workers, 8 percent of its work force, as it restructures the business.

Revenue for HP’s fiscal second quarter fell 3 percent from last year to $30.7 billion. That was about $800 million above analyst projections.

“I wouldn’t say we have turned the corner, but we are making progress,” Whitman told analysts.

To pay for severance and other restructuring costs, HP expects to take a pre-tax charge of about $1.7 billion in the current fiscal year, which ends in October. It expects to take charges of an additional $1.8 billion through fiscal 2014.

The Associated Press contributed to this report.

Comments (58)

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  • therev2nd
    Posted on May 24, 2012 at 7:29am

    Wow ! Ever notice how the executives who make the strategy that causes the need for these reductions never suffer the same consequences ?

    Report Post »  
  • Mr Sanders
    Posted on May 24, 2012 at 7:02am

    $3.5B is a good start for a ‘dream machine’ business unit – It is unfortunate that employees will have to be laid off; can‘t sell assets on EBay since everyone’s [Biz & Sm. Biz] holding their breath till the election happens. This ‘will’ determine the future of biz in this country.

    Just think about it. Look at what we’re going to have to do in Big-G! 27K layoffs are going to be pittens compared to Big-G layoffs. Now, if we start drilling here, put clean coal back on the map, and get the rigs back in the gulf, and really develop a Domestic Energy Policy, we may be able to just shift the layoffs to the Energy Sector.

    If We have ‘energy’, cheap energy, being common sense about balanced conservationist, MAN!! There would be no stopping US. It happened once….

    It CAN happen again.

    Wow! Sorry. Where did that come from? Back to HP.

    Maybe HP should consider a re-locate; Texas, Tenn, Colorado, Wyoming – food for thought?

    If CA votes for more taxes that should be the final wake-up call for Biz/Sm Biz and HP.

    Minaturization of the PC to tablets make sense. Workstations/Desktops will never disappear until floating-either interaction occurs [years off] or painted wallscreen tech or polymer alignment and whatnot. Interaction with data & problem solving is the biggest tech challenge. Someday, I would hope that the Home Office would be a circle, being a person that is in ‘graphics’ and the walls are completely interactive.

    I love HP plotters/printers – Ke

    Report Post » Mr Sanders  
  • Individualism
    Posted on May 24, 2012 at 6:46am

    CEO’s get payed millions a year to let people go and destroy companies well that has been the case recently, basically there like President Obama to this country.

    Report Post » Individualism  
    • 13th Imam
      Posted on May 24, 2012 at 7:21am

      The way Barry’s JOB counters use his new math, there will be an Increase of JOBS created. Please let us all know how this works.

      Report Post » 13th Imam  
    • lukerw
      Posted on May 24, 2012 at 11:42am

      The Executives… and Board Members… have attended the same Universities as other Liberals… and they bring their “religion” into the Work Place… where they desire, Flat, Predictable, Monthly Sales, alike in Communism… because they do not know how to Manage Capitalism, where Supply & Demand operate upon Market Forces. Hence, they make Bad Business Decissions!

      Report Post » lukerw  
  • Individualism
    Posted on May 24, 2012 at 6:38am

    These companies are so stupid, she ran EBAY into the ground and now she will run hp in the ground, just because they were a CEO for another company doesn‘t mean they were good CEO’s. Meg Whitman will lose every office she runs for now because she will be known as a job killer like Mitt Romney.

    Report Post » Individualism  
    • Stoic one
      Posted on May 24, 2012 at 10:41am

      The biggest job killer I know of is currently OCCUPYING the white house.

      Report Post » Stoic one  
  • ishtar
    Posted on May 24, 2012 at 5:22am

    probably most are pencil pushers anyway

    Report Post » ishtar  
  • moussiagilda
    Posted on May 24, 2012 at 4:45am

    And suddenly we’re allies. Don’t be a victim of the pro-war, racist Occupy movement.

    Report Post »  
  • moussiagilda
    Posted on May 24, 2012 at 4:24am

    The Blaze right now is a pro-war, racist website.

    Beck is not that way. GD it — what a sudden revelation –

    The Occupy movement is racist.

     
  • moussiagilda
    Posted on May 24, 2012 at 4:23am

    Post what I wrote.

    Report Post »  
  • ThePostman
    Posted on May 24, 2012 at 4:20am

    Oh, I recognize this! Our president called it “hope and change”.

    Had enough yet?

    Report Post »  
  • moussiagilda
    Posted on May 24, 2012 at 4:17am

    Oh, Becket Adams, offspring of Samuel Beckett. You spectacularly accomplished liar. You bold-and-brazen unionista. Nothing like that happened. The opposite of that happened.

    The poetry book that my Ma wrote, and I illustrated, is in the Rainbow Collective bookstore in Madison. No kiddin’.

    Report Post »  
  • marcus_arealius
    Posted on May 24, 2012 at 4:04am

    Some random comments:

    1. This is obviously a lie perpetrated by the tea party. Everyone knows Ovomit created millions, or was it billions of jobs? Whatever.

    2. How much would HP save annually if they laid off ALL their employees? Just asking.

    3. How come female CEOs seem to drive the company into the ground? That sounds biased so let me get back to all of you on this.

    4. I still have my HP 16C of at least 25 years ago, it still works great. Why now would I buy an HP product if the old one still works? Oh, does HP make more than calculators?

    5. Why not outsource the entire company to India? Half of the population of India craps in the open (that means no toilet for you libs). Think of all the restroom facility savings over there. And no butt wipe to go into the sewage system, er wait, does India have a sewage system?

    6. What factor does being based in a communistic state like Californicatia have on their operating expense? Why not relocate to some place cheap. miserable and boring like Omaha.

    And that’s my half dozen for the night.

    Report Post »  
  • jimmyv777
    Posted on May 24, 2012 at 2:28am

    If they can run the company by cutting jobs and make the shareholders more money then that’s called capitalism. If you are good at what you do then the company will keep you because of your talent or you will find a better opportunity but if a company can run more efficiently by cutting jobs then so be it. HP is not the Red Cross!! I am tired of these people calling every cut as greedy corporations. The name of the game is to be as profitable as possible and the jobs will follow with the success of the company. You don’t start a business to create jobs but to make money and the jobs will follow suit!!!!

    Report Post »  
  • Domestic_Enemy
    Posted on May 24, 2012 at 2:26am

    While I feel bad for those who loose their jobs (excluding those who take early retirement) anyone who pays attention to the industry could see this coming. HP has made acquisitions that have not panned out (Palm) or put to good use (Palm), and they have had a TON of negative press the last year. I can only hope this is a turning point for HP, and not the beginning of an AOL/Yahoo type slide where every quarter people are let go. HP needs to INNOVATE to stay relevant.

    Report Post »  
  • pdw
    Posted on May 24, 2012 at 2:16am

    They are still building better PC’s each year and many will still have a good use for them for many years to come. We do not need to play games in fact they just cause a lot of problems when using a computer. Leave the games to those made for games and let those that have something to do with their lives keep using the Computers. There are many that still have a great need for personal computers. It is one of the greatest uses for storing personal information as well as for writers and businesses. I keep a lot of personal records as well as store information on my hobbies, etc. If a company does not keep up by providing the entertainment gadgets then they will not make profits from them, but do not tell me they are losing money, they are just not making the money they would like because they are not using good business practices and need to get a better R&D department.

    Report Post »  
  • jimmyv777
    Posted on May 24, 2012 at 2:04am

    Here is Meg Whitman making the necessary cuts so HP can remain lean and mean and be a viable company for years to come. Now the left would say Hp is greedy and they are firing the people who made them rich even if by not cuttting jobs, HP would go bankrupt! I guess if Jerry Brown was the CEO he would hire 20,000 more workers and spend millions of stimulus so HP could thrive, oh that’s right only governments can run a defecit like that. How did Jerry Brown beat Meg Whitman, well California is on the bankruptcy clock but they can just keep taxing and spending and it will all work out!! HAHAHA, what a Joke!

    Report Post »  
    • RepubliCorp
      Posted on May 24, 2012 at 6:27am

      Obama thinks you start a company to hire people and pay taxes

      Report Post » RepubliCorp  
  • The-Monk
    Posted on May 24, 2012 at 1:57am

    “Hewlett-Packard Co. plans to cut 27,000 jobs…. expects to save as much as $3.5 billion annually from the job cuts”

    $3,500,000,000 divided by 27,000 jobs = $129,629.63 per job plus other austerity measures.
    So, about $130K per job lost.

    Report Post » The-Monk  
  • lassiegirldawn
    Posted on May 24, 2012 at 1:39am

    I am in the industry and the reasons they are not making PC’s anymore are because they are too hard to keep track of peoples information. With the mobile devices, they can track and see your information any time. They came up with The Cloud and other programs like that so they can censor and erase any information they see fit. This was also the big push for HD televisions; they can see and hear whatever is going on in our homes. Even if you turn off your cell phone they have access, you have to disable the battery. HP is in the bag with targeting our personal information.

    Report Post »  
    • Diane TX
      Posted on May 24, 2012 at 1:59am

      Lassie, you must be a “young-in”. I used to be a computer programer when all we had was mainframe computers that took up entire rooms. Input was punch cards and magnetic tape. Oops, I think I gave away my age.

      Report Post »  
    • GO-FOR-LIBERTY
      Posted on May 24, 2012 at 7:10am

      Another reason for the demise of HP. While talking to my computer geek he informed me to stay away from HP products for they were good but then started to use junk (his word) in their products which were always breaking down.

      Report Post »  
    • teddrunk
      Posted on May 24, 2012 at 8:21am

      Diane..Ah, back when computers had tubes in them, like old radios. Jus‘ kiddin’

      Report Post »  
  • LeadNotFollow
    Posted on May 24, 2012 at 1:38am

    …
    27,000 more lost jobs.
    Thanks to Barack Hussein Obama and his Hopey Changey crap.

    Report Post »  
  • trappedinwv
    Posted on May 24, 2012 at 1:22am

    I have a kick butt PC for games that no one uses, because PC games pretty much suck now. I won’t buy another PC. If they were still making good PC games then I would keep my PC upgraded and buy a new one when it is outdated, they just don’t have any good games in my genre anymore.

    Report Post »  
  • Bryan B
    Posted on May 24, 2012 at 1:17am

    I pray for all of them that are going to be let go from their jobs……It’s not easy out there…..

    Report Post » Bryan B  
  • davidwjohnson
    Posted on May 24, 2012 at 12:55am

    I understand Obama is going to blame Romney for this because last week a HP executive and a Bains Capital executive were on the same plane from New York to Dallas.

    Report Post »  
    • Therightsofbilly
      Posted on May 24, 2012 at 1:24am

      Or ;he could just blame Bush.

      Report Post » Therightsofbilly  
    • The-Monk
      Posted on May 24, 2012 at 1:33am

      Hi Billy,
      Did I do something to tick off RJJ?

      RJJ replied;
      “THE-MONK, Saw it in the news earlier. Actually was avoiding on it here.”

      Report Post » The-Monk  
    • RJJinGadsden
      Posted on May 24, 2012 at 1:44am

      THE-MONK, Absolutely not Bud. Just have limited time. Wouldn‘t even be up now if I didn’t have some acid indigestion. Just sucked down some Alka Seltzer and about to head back to bed. 0400 comes really early. Sorry to have mislead you.

      Report Post » RJJinGadsden  
    • Diane TX
      Posted on May 24, 2012 at 1:52am

      Thanks for the laugh. Obama is already back to blaming Bush.

      Report Post »  
    • The-Monk
      Posted on May 24, 2012 at 2:04am

      @RJJinGadsden

      No problem. Since it’s 0200… 0400 is cutting it way too close. Go to bed and I’ll send you a Monks Blessing for tonight. : )

      Report Post » The-Monk  
    • Therightsofbilly
      Posted on May 24, 2012 at 2:11am

      Hey Monk,

      Did you see the new eyeball?

      Report Post » Therightsofbilly  
    • The-Monk
      Posted on May 24, 2012 at 2:22am

      Hi Billy,

      Not yet, the new spaces got in the way and they are working on it. A programming glitch I’m told.

      Report Post » The-Monk  
    • RJJinGadsden
      Posted on May 24, 2012 at 6:08am

      THE-MONK, Back up and at it this morning. So how’s tricks with both you and BILLY? Missed something, so what is this eyeball?

      Report Post » RJJinGadsden  
  • socialism.rocks
    Posted on May 24, 2012 at 12:55am

    the computers turned to crap the most cheaply built machines— they are built with the cheapest motherboards plus parts…….ect ect every hp user i have known paid twice as much for half as good product…

    Emachines are better then hp and cost a third they do

    its cause hp went for high profits while making their computers cheaply as possible you expect something when you pay a certain amount… of money

    Report Post » socialism.rocks  
    • trappedinwv
      Posted on May 24, 2012 at 1:19am

      You do realize, that regardless of the brand of PC you buy, most computer components are made by the same companies now. They all buy from the same suppliers.

      Report Post »  
    • Therightsofbilly
      Posted on May 24, 2012 at 1:28am

      It’s etc., socialist boy.

      Once is a typo.

      Twice is ignorance.

      Report Post » Therightsofbilly  
    • Therightsofbilly
      Posted on May 24, 2012 at 2:09am

      Hey Socialism boy,

      When all of us boomers are gone as you like to say, and you weenies get your marxist utopia that you dream of, don’t expect too much from anything, or anyone, no matter how much you pay.

      You will take what you get……..and you will like it.

      :o{

      Report Post » Therightsofbilly  
    • Abysmal
      Posted on May 24, 2012 at 2:11am

      I agree! And when a poor quality reputation and lack of innovation comes back to bite you, that is proof that Capitalism Rocks!

      Report Post » Abysmal  
    • CatB
      Posted on May 24, 2012 at 4:32am

      I have always had Dell for laptop/notebook .. I got an HP to use for travel .. I wanted a white keyboard to see better in low light and all I could find was an HP .. IT SUCKS! Never had the problems with the Dell I have had with the HP ..

      Report Post »  
    • RJJinGadsden
      Posted on May 24, 2012 at 6:26am

      BILLY, You’ve got that right. You are pointing out some of the things that some of the escaping Cubans shared with us at the Mariel Boat Lift, as well some of the former East Germans that had escaped to the West. The only thing that true socialism will share is misery. Some of these whiney little brats that grew up not knowing about what the former Soviet Union was doing to it’s people should meet and have long conversations with those who escaped it.

      Report Post » RJJinGadsden  
  • lukerw
    Posted on May 24, 2012 at 12:46am

    The have been preparing for a Dream World that never came… for over a Decade!

    Report Post » lukerw  
  • Snowleopard {gallery of cat folks}
    Posted on May 24, 2012 at 12:43am

    This is the way of the free market and capitalism; you either change and adapt or go into the night.

    Report Post » Snowleopard {gallery of cat folks}  
  • Psychosis
    Posted on May 24, 2012 at 12:40am

    here is to hoping all the cuts stay in california

    merry christmas you looney liberals

    Report Post » Psychosis  
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