HP plans further job cuts
Amid a continued economic slowdown, Hewlett-Packard has disclosed plans to cut 16,800 jobs by October of next year, 1,800 more than the company had originally stated.
HP detailed the cuts in its quarterly filing with the Securities and Exchange Commission earlier this month. In the Sept. 13 filing, HP noted that it planned to take restructuring charges related to the early retirement or termination of 8,200 HP workers and 8,600 employees of premerger Compaq Computer.
Employees were notified of the additional cuts last week.
The cuts were made necessary by the "continued market slowdown," HP said in a statement--echoing an impression that has been noted by HP CEO Carly Fiorina, President Michael Capellas and CFO Bob Wayman.
"As Carly, Michael and Bob reported during the earnings announcement, HP will continue to size HP's business according to changing market dynamics and business drivers," the company said in the statement. "Many of those dynamics have changed since the announcement and closure of the merger--in particular, the slowdown in enterprise IT spending which is persisting 6-18 months longer than previously estimated by most economists."
HP said it continues to hire in some areas such as its services and printing businesses.
When it reported earnings last month, HP said it had cut 4,740 jobs in the past quarter and 1,700 more through the better part of August. Capellas said it was on track to cut 10,000 jobs by Nov. 1, but would not comment on whether layoffs might climb above the original 15,000 level.
HP said that the 16,800 cuts refer to the net job reductions through early retirement and its work force reduction program. The figure does not reflect the number of workers who quit the company or those who are hired in other areas, meaning the company might end up with the total number of jobs reduced being more or fewer than the 16,800 figure.
The company has continued to lose share in its PC and in parts of its enterprise business since the deal closed in early May, a trend that Wayman said the company hopes to reverse.
Whether HP would ultimately need to cut more than 15,000 jobs to meet its financial targets was a key issue raised by opponents of the merger during the eight-month proxy battle that ended when shareholders narrowly approved the nearly $19 billion deal.