Hewlett Packard to eliminate 27,000 jobs
24 May 2012
Hewlett Packard (HP) plans to eliminate around 27,000 jobs over the next couple of years and save up to $3.5 billion annually, as the technology giant cuts costs in order to cope with the receding demand for computers and services.
The job-cuts, which would amount to 8 per cent of its global workforce of 324,000, would come mainly through early retirement and is expected to be completed by the end of fiscal year 2014.
A third of the job cuts would come from the US, with some workers getting early retirement while others will be asked to leave by October 2014.
The company said the reduction in workforce will save as much as $3-$3.5 billion annually, and take a pretax charge of $1.7 billion in fiscal 2012 related to the layoffs.
The Palo Alto, California-based company expects to achieve additional savings from non-headcount cost reductions, including supply chain optimisation, SKU and platform rationalisation, go-to-market strategy simplification and business process improvement.
The job cuts were announced during the release of its Q2 earnings report yesterday, which topped analyst's estimates.
Revenues at the world's largest personal computer maker exceeded the average projection of $29.9 billion made by Bloomberg, Reuters and analysts. HP said sales for the quarter were $30.7 billion, down 3 per cent from a year ago, while profit was $1.6 billion, down 31 per cent from the same period a year ago.