Hewlett-Packard is planning to cut between 25,000 and 30,000 jobs, the company has announced.
The move is part of an effort to split Hewlett-Packard into two units, which is set to take place in November.
The losses will come in Hewlett Packard Enterprise, which is splitting from the company’s printer and personal computer business.
The tech company says the cuts will save it $2.7 billion in annual costs, but it will take a $2.7 billion charge to execute the plan.
At a meeting for Wall Street analysts, chairman and chief executive Meg Whitman said: “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.”
The company has struggled over the last decade to keep up with changing demands as customers move away from desktop computers.
HP already plans to lay off 55,000 employees as part of the restructuring process that started in 2012.
Hewlett-Packard (HP) announced an 18% rise in profits to $1.3 billion for the second quarter in a statement that was accidently released before US stock markets closed.
The tech giant said that despite rising profits, it plans to lay off an additional 11,000 to 16,000 workers.
HP had previously announced it would cut 34,000 jobs as part of a restructuring announced in 2012.
HP said that despite rising profits, it plans to lay off an additional 11,000 to 16,000 workers
Shares in HP fell after the early release of the news.
HP CEO Meg Whitman said in a statement: “I’m pleased to report that HP’s turnaround remains on track.”
“We’re gradually shaping HP into a more nimble, lower-cost, more customer- and partner-centric company.”
However, analysts were disappointed by HP’s revenue growth, which fell 1% from the same period a year ago to $27.3 billion.
HP has been hit hard by declining PC sales as consumers shift towards devices such as tablets and smartphones.
Meg Whitman has tried to shift the firm’s focus to computing equipment and networking gear for business clients.
HP began a restructuring plan in 2012 that was designed to simplify the company’s business processes, accelerate innovation, lower costs and deliver better results.
Meg Whitman said the turnaround remains on track, and added: “With each passing quarter, HP is improving its systems, structures and core go-to-market capabilities.
“We’re gradually shaping HP into a more nimble, lower-cost, more customer- and partner-centric company that can successfully compete across a rapidly changing IT landscape.”
HP has not specified when it expects to see the full results of its restructuring strategy. But analysts are suggesting the company should probably take a closer look at its product mix.
HP’s personal systems division was the only segment that showed a gain in revenue in the second quarter. Other divisions, namely printing as well as enterprise group and services posted a drop in revenue.
The decline in revenue is one of the main reasons HP is cutting jobs.
Hewlett-Packard, the world’s largest maker of personal computers, is planning to cut 27,000 jobs by end of 2014.
Hewlett-Packard said the cuts – about 8% of its workforce – will reduce costs by up to $3.5 billion a year.
The company said in a statement that the money would be reinvested.
The move was part of a “productivity initiative designed to simplify business processes” and comes as rival products such as the iPad tablet computer eat into HP’s sales.
As part of the changes, the head of HP’s Autonomy division, Mike Lynch, is being replaced by Bill Veghte, HP’s chief strategy officer. Mike Lynch will leave after what HP called a “transition period”.
Hewlett-Packard, the world's largest maker of personal computers, is planning to cut 27,000 jobs by end of 2014
Mike Lynch founded software company Autonomy as a small start-up and turned into one of the UK’s largest technology companies.
It was bought by HP last year for more than $10 billion.
HP employs about 350,000 people worldwide and about 20,000 in the UK. A spokesman said it was too early to say exactly where the job cuts would hit, but no part of the business would escape some losses.
“We have not yet announced specific plans with regards to specific locations. We do expect the workforce reduction to impact just about every business and region,” the spokesman said.
News of the job losses overshadowed the release on Wednesday of HP’s latest quarterly results. The company’s profits and revenues were both better than analysts had estimated.
California-based HP reported a 31% fall in profits in the second quarter to $1.6 billion. Revenue in the period fell 3% on a year ago to $30.7 billion.
Meg Whitman, HP’s chief executive, said: “This quarter we exceeded our previously provided outlook and are executing against our strategy, but we still have a lot of work to do.”
The former chief executive of eBay joined HP in September, vowing to turn around the company after a series of problems including a failed tablet computer and an announcement that it was considering an exit from the PC business.
Her predecessor, Leo Apotheker, was ousted after just 11 months on the job.
HP’s shares, which fell as much as 5% on Wednesday and closed 3% down, were up 6.6% in after-hours trading on Wall Street.
HP TouchPad Australian exclusive retailer, Harvey Norman has decided to pull HP tablet from shelves, rushing the liquidation of HP’s tablet from the market barely weeks after its launch.
HP TouchPad launch on Australian market had happened only 4 days before Hewlett-Packard‘s unexpected decision to discontinue device operations, the Register reported.
Harvey Norman’s decision came even as Hewlett-Packard’s PR agency was sending review devices to technology writers, the report said.
The HP TouchPad is not currently listed on the retailer’s Web site anymore. Harvey Norman said it will offer full refund to customers who would return the tablet following the decision.
Harvey Norman has decided to pull HP TouchPad from shelves
[googlead tip=”lista_mare” aliniat=”stanga”]The customers who decide to keep HP TouchPad have been warned that post-sales service would not be available. Only about 1000 HP TouchPad had been sold before the decision to pull them from the shelves was announced.
HP made the surprising announcement, which shocked the entire industry, on Thursday saying it was exiting the PC business and discontinuing operations for HP Touchpad tablet computer based on Palm’s webOS software.
It said HP board has “authorized the exploration of strategic alternatives for its Personal Systems Group” and plans to close down its webOS device business. The shocking announcement came only few days after Google agreed to buy Motorola Mobility for $12.5 billion.
HP’s decision apparently followed the poor performance of HP TouchPad just weeks into its worldwide launch. The tablet got only a small impact on the market and was unable to compete with Apple’s iPad 2 and other Android tablets in terms of both features as well as ecosystem.
Following negative market feedback, HP reduced HP TouchPad price by $100 to boost its sales, but that did not help. Best Buy and other HP retailers started complaining of more than 200,000 units lying unsold in their warehouses. In response to their complaints, HP credited Best Buy and other resellers about $100 million for their unsold inventory.
As a result of HP’s decision to exit personal computer business, the HP TouchPad was immediately on a fire sale, with retailers reducing prices drastically. 16GB and 32GB tablets prices were reduced considerably to $99 and $149 respectively.
“HP will be lowering the price of the TouchPad beginning Saturday 8/20/11. This is the lowest price ever for the TouchPad so please post it as soon as it goes live,” an HP memo had said.