HP slashing as many as 16K more jobs in bid to further cut costs
Company's chief executive said cuts not being made because of forecast decline in demand
LOS ANGELES—Hewlett-Packard Co. (HP) said it aims to cut another 11,000 to 16,000 jobs by October, bringing the total number of planned layoffs to a maximum of 50,000 and nearly doubling the largest payroll reduction ever for the 75-year-old technology giant.
HP’s move revises upward a previous target of 34,000 job cuts.
In May 2012, eight months after former eBay Inc. CEO Meg Whitman took the reins, HP unveiled the chief executive’s initial restructuring plan, which called for a headcount reduction of 27,000.
When the program was first announced, the company had nearly 350,000 employees.
As of October, it had 317,500.
Whitman said the extra cuts are being made because the company sees further opportunity to cut costs, not because of a forecast decline in demand.
“I would say I’m feeling more confident because we have seen a stabilization of revenue,” she told analysts on a conference call. “The high single-digit declines are over.”
She also said she doesn’t anticipate further cuts.
The Palo Alto, Calif.-based company said the reductions will save an extra US$1 billion annually by the fiscal year through October 2016.
HP announced the cuts while reporting that net income in the three-month period ending April 30 rose 18 per cent to US$1.27 billion, or 66 cents per share.
Excluding special items such as restructuring charges, adjusted earnings were 88 cents per share, meeting the expectation of analysts polled by FactSet.
Revenue fell one per cent to US$27.31 billion, below the US$27.43 billion analysts expected.
HP’s quarterly results were unexpectedly released early, before markets closed.
The company said it expects adjusted earnings of 86- to 90 cents per share in the current quarter, with the midpoint a penny below the 89 cents analysts are looking for.
Personal computer sales—HP’s largest source of revenue—rose seven per cent to US$8.2 billion as buoyant sales to businesses offset a slight consumer decline.
Printing revenue fell four per cent to US$5.8 billion.
Enterprise group revenue fell two per cent to US$6.7 billion while enterprise services revenue fell seven per cent to US$5.7 billion.