28 May 2012
HP cuts jobs by nearly 30,000
Hewlett Packard has outlined plans for a "multi-year productivity initiative" designed to simplify business processes, advance innovation and deliver better results for customers, employees and shareholders.
The restructuring is expected to generate annualised savings in the range of $3.0 to $3.5 billion exiting fiscal year 2014, of which the majority will be reinvested back into the company.
HP expects to use the savings to boost investment in innovation around its three areas of strategic focus: cloud, big data and security, as well as in other segments that offer attractive growth potential.
As part of the restructuring, HP expects approximately 27,000 employees to exit the company, or 8.0% of its workforce as of Oct. 31, 2011, by the end of fiscal year 2014. Workforce reduction plans will vary by country, based on local legal requirements and consultation with works councils and employee representatives, as appropriate.
"These initiatives build upon our recent organisational realignment, and will further streamline our operations, improve our processes, and remove complexity from our business," said Meg Whitman, HP president and chief executive officer. "While some of these actions are difficult because they involve the loss of jobs, they are necessary to improve execution and to fund the long term health of the company. We are setting HP on a path to extend our global leadership and deliver the greatest value to customers and shareholders."
HP expects to reinvest savings in each of its business segments to strengthen their ability to stay ahead of customer expectations and capitalize on growing market trends.
As a result of this restructuring, HP expects to record a pre-tax charge of approximately $1.7 billion in fiscal 2012 that will be included in its GAAP financial results for that period. Through fiscal 2014, HP expects to record additional pre-tax charges approximating $1.8 billion that will be included in its GAAP financial results for the appropriate periods.
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