Hewlett Packard announces new job cuts
It plans 30,000 layoffs as it splits into two businesses.
Hewlett-Packard (HP) announced yesterday (September 15th) it will cut between 25,000 and 30,000 jobs, which is roughly ten per cent of its workforce. It said the move is part of plans to split the company in two, with Hewlett Packard Enterprise (HPE) separating from the printer and PC business.
HP Enterprise will focus primarily on businesses and government agencies, while the PC and printing divisions will target the consumer market.
The tech giant, which had already removed 55,000 jobs earlier this year, said the cuts will save $2.7 billion (£1.76 billion) in annual costs.
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."
Changing environment
Hewlett Packard has faced tougher trade conditions in the past decade, with customers moving away from desktop computers and opting instead for laptops and tablets.
It is now into the fourth year of its five-year recovery plan and the split is an integral part to help it adapt to the changing market.
As mobile and online computing becomes even more popular, the company has needed to address its areas of weakness and by splitting its operations it believes this will be made possible.
In its fiscal third quarter ended July 31st, HP's revenue from its PC and printer business fell 11.5 per cent.
HPE will have revenue of more than $50 billion this year, and is expected to report an adjusted profit of $1.85 to $1.95 per share in 2016, the company said.
It has recently announced it is selling a 51 per cent stake in its Chinese server business to Tsinghua Holdings for $2.3 billion.
HP shares were up 0.9 per cent at $27.35 in premarket trading today.