HP to eliminate up to 30000 jobs

HP announced the spin-off a year ago amid the market shift from PCs to mobile devices that has reduced demand for numerous company’s key products.

After announcing 55,000 redundancies earlier this year, computer hardware giant Hewlett-Packard (HP) has revealed another 30,000 jobs will be axed before the corporation completes the planned separation of its business.

Hewlett-Packard Company is a global supplier of products, technologies, program, solutions and services to individual consumers, small- and medium-sized companies (NYSE:HPQ) and large enterprises, including customers in the government, health and education sectors.

It was just seven years ago that Hewlett-Packard nearly doubled its workforce with the acquisition Electronic Data Systems Corp.to about 320,000 employees, according to data compiled by Bloomberg. BMO Capital Markets reaffirmed a hold rating on shares of Hewlett-Packard Company in a research note on Monday, August 24th. The cuts will account for about 10% of the company’s 300,000 person workforce.

In other Hewlett-Packard Company news, EVP Robert Youngjohns sold 4,719 shares of the company’s stock in a transaction that occurred on Tuesday, July 21st. Overall, the cost cutting is estimated to deliver $2.7 billion a year in annual savings, gouged out of the earnings of HP workers who will soon be on the unemployment lines. One of the new businesses, Hewlett Packard Enterprise, will supply businesses with high-end technology, while HP Inc. will sell personal computers and printers.

He said “you have to wonder how they’re going to get business done” with so many cuts, especially since the split of a company into two separate segments usually requires more workers, not fewer.

“We have an opportunity to be more successful as two companies than we would as one”, Chief Executive Officer Meg Whitman said at the event.

“These actions will eliminate the need for any future corporate restructuring”, HP Enterprise CFO Tim Stonesifer said during the analyst meeting.

The Enterprise Service division will involve more automation and be run from low cost areas of the world, Whitman said. This year 42 percent do, and executives said they plan to increase that percentage to 60 percent by 2018.

Hewlett-Packard has been telegraphing its shift to outsourcing for months, with Whitman saying in June thatthere might be a slight movement to more locations outside the U.S.

The business is expected to report free cash flow of USD3 billion to USD3.3 billion in 2016, at least half of which is expected to be returned through dividends and share buybacks. About $700 million would come from reorganization and adjustments to real estate strategy, the company said, while layoffs will save another $2 billion annually. The corporation has not specifically outlined where these cuts will fall.

Under the new structure, the customer-focused PC and printer manufacturer HP Inc. will now focus on returning cash to shareholders while expanding into new markets such as 3-D printing.