In order to better compete with IBM, Hewlett-Packard (HP) will slash about 9,000 jobs and overhaul its computer-services businesses, Bloomberg reports.
In addition to the job cuts, HP also plans to take a $1 billion charge, both to help pay for severance packages and to bring the company's data centers up to snuff so that HP can provide more automated services.
"These sets of actions will enable HP to grow better than the market," Ann Livermore, executive vice president for enterprise business, said during a conference call. "This is a substantial opportunity for us and something that we think is a good opportunity for our clients as well."
Just last month HP had raised its 2010 forecast, the third time the company has done so since November. Results have consistently beat out analysts' expectations, however job cuts are nothing new for HP. During Chief Executive Officer Mark Hurd's five year reign, HP has handed out some 48,000 pink slips so far.
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Thursday
June 04, 2010 at 3:47am
Yes, job cuts suck. But most of these job cuts will actually impact the workforce of EDS, a call center and commercial data center operation that HP aquired, including all 134,000 employees, a little more than two years ago. A high percentage of those being laid off will likely be in the UK and Canada. A friend of mine works in the Canadian Commercial devision and told me that nearly everybody in the Enterprise Services division over the age of 49 were offered an "early retirement" severance package. Apparently it actually is somewhat generous depending on the number of years of service. And for HP to be generous at all lately is shocking...lol.
Also, there may be 9000 job cuts coming, but they also announced plans to hire an additional 6000 sales and support staff. Data center managers and call center staff are located globally (obviously US too). Sales staff are almost always local.
If people want to complain about HP, complain about the things that make sense. Like how Mark Turd...I mean, Hurd...completely exploits his employees with pay decreases, reworking of bonus thresholds (the thresholds are always reworked to ensure next to no payouts) and huge delays in receiving raises, even after being promoted. You want to talk about abusing the american worker, talk about the real abuse (it's also the same up here in Canada and across the pond in the UK). It's really a shame, because HP used to be an amazing company, and a technology innovator in the highest degree. Under Mark Hurd, they have lost this edge from all the cost cutting and focusing on profit. Their reduction in R&D under his leadership is alarming.
Short term, the investors will love him. Long term, all he is doing is crippling the company.
david_max
June 20, 2010 at 8:17pm
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JohnP
June 03, 2010 at 4:01pm
I worked for HP for 24 years before, you guessed it, I was laid off. Since most of the team I worked with was laid off as well, the amount of business that part of the company brought in dropped by over 70%. But in the meantime, the company's stock did very well as the expenses were low.
There is something to be said for the sprawling companies (GE comes to mind) that had way too many completely different businesses being juggled in the air. Stick with your core business and focus on the customer's needs and your business will grow.
However, at some point, slashing jobs does exactly one thing, make the company more profitable in the SHORT TERM. This is a very narrow view from the stockholders perspective and not the company, and certainly NOT the customer's.
US companies woud be a lot better off if the stock price growth mania never took place. Focusing solely on the stock price is not good for the customer, not good for the company, and in the long run, not good for the stockholders.
Maybe it is just time for large companies to go the way of the dinosaurs. Small, nimble, well focused companies will just just speed things up.
violian
June 03, 2010 at 10:53am
...so they plan on growing bigger by slashing workforce? How does that work? At my company, they hire when they're running projects to expand the company.
Keith E. Whisman
June 03, 2010 at 7:44am
Great HP. I won't be purchasing anymore HP products.
Way to go HP. Great way to help the US economy and the American Work force. I'm sure glad to see American Corporations that care so much for the US worker. Great way to show your patriotism HP. Psss HP I hear the India, China and Mexico have some really cheap labor but the quality isn't as good as American Labor. Great trade off though as who cares about quality service and products anymore as this is the WallMart generation where everyone is used to the crappy plastic that Wallmart dishes out.
News like this absolutely scares me about the US economy as more and more jobs get sent over seas. All those high paying tech jobs in China and Taiwan while US workers are relegated to service industry jobs or if their lucky maybe a somewhat technical manufacturing job but those jobs are leaving for China and Mexico every day as these companies show that they would rather give foreigners a career then Americans. It's a penny cheaper for labor so it's ok to not hire and American. Great way to show your patriotism.
There used to be a time in this country where companies were patriotic. They believed in this country. They wanted to make money but they also wanted to help be part of the economy and help make this country great. That's why we are a world power is because of the strength of the American economy and it's workforce. It was a democrat that blended American jobs with a sense of patriotism. That was President Franklyn D. Roosevelt. Heck his CCC civilian conservation corps helped the USA pull out of the great depression. I drove companies to do all they could to remain profitable and maintain their workforce. Hell they had things like Christmas bonuses and things like that. If you still have a job when was the last time you were actually thanked for doing a great job?
Companies no longer respect the American work force and they are no longer patriotic. There is no longer any pride in being an American company. Made in America doesn't mean anything any more. It no longer elicits any kind of pride. I'm a republican and I voted for Obama because I know that we need another President Roosevelt to get us out of this and it has been evident from the first weeks that Obama is nothing at all like Roosevelt in any way. In fact the polar opposite is true.
angryelf
June 03, 2010 at 7:12am
The CEO's and board at HP increase earnings by reducing payroll. We aren't really making any money we're only cutting costs (i.e. firing US employees while maintaining overseas workers who are cheaper). What ever happened to Corporations that valued their employees. Seems no matter what you do at HP, you are not safe, nor are you valued.
If we, the HP'er are not valued....do you think they give a squat about their customers? All they care about is that the payments keep coming. They will give as little as possible and take as much as they can.
Mark Hurd, I hope your Karma hits you square in the face, and I hope it's public.
Thursday
June 04, 2010 at 3:50am
Karma and Mr. Turd really do need to meet up one day for a little "cosmic rebalancing"...
cynical
June 03, 2010 at 5:48am
gg hp. No one likes automated support lines. They're pretty much worthless and they annoy your customers. Nothing like paying thousands of dollars a year in support contacts to speak with a talking wall. Good thing we're already transitioning away from your servers to IBM boxes.
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