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HP may cut 30,000 jobs: Report

Posted: 23 May 2012     Print Version  Bookmark and Share

Keywords:job cuts  PCs  restructuring  enterprise services group 

Hewlett-Packard is reportedly planning to cut about 25,000 to 30,000 jobs. That amount of job cuts would represent 8 to 10 per cent of the company's total workforce. The PC maker is expected to announce its restructuring plan soon.

The focus of this restructuring would be to reduce cost, and help the company cope up with the decreasing demand for computers and services.

Most of the cuts, around 10,000 to 15,000 will be from HP's enterprise services group. The unit, which sells a range of information technology services, has been struggling with decreasing profitability, said sources from the company who choose to remain anonymous. The sources also added that the plans are not final and may still change.

Since taking office in September, HP CEO Meg Whitman has been trying to turnaround the company's declining sales that led to the ouster of her predecessor, Leo Apotheker.

HP's PC sales have continued to drop as consumer demand for tablets, such as Apple's iPad and Samsung's Galaxy Tab, continue to grow.

The company has also been slow to adapt to the shift towards cloud computing, away from the IT services HP provides.

Brian Marshall, an ISI group analyst, has already commented on an earlier research note that it was possible that HP will reduce its workforce. "This would enable investments in strategic, higher grown areas," Marshall said. Eliminating 18,000 jobs could result in savings of about Rs.6,282.72 crore ($1.2 billion) and add Rs.26.18 (50 cents) to annual per-share earnings, he estimated.

The overall reduction and additional cost savings throughout the company could result in savings that reach billions of dollars, according to a source from the company.

Last March, Whitman announced that the company is combining its PC and printing divisions, which ended speculations of a spin-off of HP's PC unit.

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