HP To Sack Over 25,000 Employees Worldwide Due To Low Sales.
Hewlett-Packard Co, which is splitting into two listed companies later this year, said on Tuesday it expects to cut another 25,000 to 30,000 jobs in its enterprise business as the tech pioneer adjusts to falling demand.The latest cuts, on top of layoffs of 55,000 workers previously announced under Chief Executive Officer Meg Whitman, notably will be in the company’s faster-growing corporate hardware and services operations, to be spun off as Hewlett Packard Enterprise, or HPE, on Nov. 1.
The latest job cuts indicate a reduction of the company’s total workforce by at least 10 percent, based on the company’s most recent number of more than 300,000 employees as of October 31, 2014, and reflecting the previously announced reduction of 55,000.
The company indicated the cuts will be global, but provided no specifics.
Under the split into two companies, the other company, HP Inc, will comprise the computer and printer businesses, which have been hit hard by a relentless decline in sales of personal computers.
“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,” Whitman said in a statement.
The job cuts, aimed at saving $2.7 billion (roughly Rs. 17,944 crores) a year, will result in a charge of about $2.7 billion, beginning in the fourth quarter, HP said.
Job cuts have become a way of life at the company in recent years as it has digested a series of acquisitions that failed to revive its fortunes.
“The number is sadly larger than some people might have expected, but I think it’s a reflection of how much trouble HP has been having with its services,” said Charles King, president and principal analyst of Pund-IT, a Silicon Valley IT consulting firm.
Hewlett-Packard’s chief financial officer, Cathie Lesjak, said last month that HP expected the previously announced job cuts of 55,000 under Whitman to increase by up to 5 percent by the end of October.
“I’m frankly not sure if HP is finished with the layoffs,” King said, saying he expects the job cuts and the shuffling of people and positions to continue well into 2016.
HP said it is moving more of its workers to lower-cost locations as part of its efforts to cut costs. In its 2013 fiscal year, the company said 36 percent of the employees in the unit of HPE called enterprise services worked in what it called low-cost locations. This year 42 percent do, and executives said they plan to increase that percentage to 60 percent by 2018.