The layoffs are part of a plan to cut $2.7 billion in annual costs, the company said. In a Re/Code report, he said that by the end of HP Enterprise’s fiscal year 2018, only 40 percent of the group’s workforce will be located in high-cost countries.
The target means 10 to 12 percent of the 252,000 workers joining HP Enterprise will lose their jobs as part of the company’s effort to reduce its expenses by $2 billion annually.
Fiorina presided over more than 30,000 job cuts and the controversial takeover of PC maker Compaq, before she was forced to resign in 2005. Its software, consulting and data analysis sections will come under the newly-formed Hewlett Packard Enterprise, separate from its personal computer and printer businesses.
What’s worrying is that these job cuts are in addition to the 55,000 layoffs previously announced under Chief Executive Officer Meg Whitman.
HPI plans to release its long-awaited HP multi-jet fusion enterprise-level 3D printers next year.
“Hewlett Packard Enterprise will be smaller and more focused than HP is today”, said Whitman, who will be president and CEO of the new company.
In a bid to curtail overheads and restructure its business, Hewlett-Packard Co, is expected to let about 25,000-30,000 people go.
The move by HP, the world’s second-largest PC maker and one of the biggest USA tech firms, is the latest in the sector based on the belief that tightly focused firms perform better.
Indeed, Whitman’s latest statement about these “final actions eliminating the need for any future corporate restructuring” may ring a little hollow for some, when HP’s corporate restructuring track record is examined.
Whitman said that the restructuring will allow Hewlett Packard Enterprise to be more competitive and have a more sustainable cost structure.
However, the company expects that revenue from its cloud-related businesses to grow by more than 20% per year over the next several years.
The business is expected to report free cash flow of $US2.0 billion to $US2.2 billion in 2016, at least half of which is expected to be returned through dividends and share buybacks.