Hewlett-Packard announced Tuesday that it plans to cut another 25,000 to 30,000 jobs as the once-iconic company prepares to split into two publicly traded companies.
The cuts, which amount to about 10 percent of the company's 300,000-employee global workforce, will primarily impact the company's enterprises services group, which focuses on cloud technology and cybersecurity. The job cuts are part of a restructuring plan expected to save the company $2.7 billion in annual costs, the company said.
"These restructuring activities will enable a more competitive, sustainable cost structure for the new Hewlett Packard Enterprise," HP CEO Meg Whitman said in a statement. "We've done a significant amount of work over the past few years to take costs out and simplify processes, and these final actions will eliminate the need for any future corporate restructuring."
The cuts are in addition to the 55,000 job cuts that HP first began announcing in 2012. Since Whitman took over HP in 2011, there have beenof at the Palo Alto, California-based company.
HP is scheduled to split into two companies in November. Hewlett Packard Enterprise will focus on servers and services operations, while HP Inc. will sell slower-growth products such as PCs and printers.
The split, announced last October, is designed to help the Silicon Valley pioneer better compete with Amazon, Google, IBM and Microsoft in the fast-growing business of renting access to servers and services for data storage. The cloud computing market is expected to be worth $70 billion this year, according to market researcher IDC.
Hewlett Packard Enterprise, which is scheduled to begin trading on November 1 on the New York Stock Exchange under the ticker symbol "HPE," is expected to have more than $50 billion in annual revenue.
"Hewlett Packard Enterprise will be smaller and more focused than HP is today, and we will have a broad and deep portfolio of businesses that will help enterprises transition to the new style of business," said Whitman, who will serve as CEO of the new enterprise company.
The layoffs will result in a $2.7 billion charge that will begin to show up in HP's fiscal fourth quarter, which ends October 31. Hewlett Packard Enterprise will also reduce costs by $700 million by realigning real estate and other portfolios.
HP's stock, which has lost about a third of its value since December, rose 7 cents, or 0.26 percent, to $27.11 in regular trading Tuesday.