Hewlett-Packard Reports $1.6 Billion Profit, Gets Ready to Print 27,000 Pink Slips

Paul Lilly

Hewlett-Packard on Wednesday announced financial results for its second fiscal quarter ended April 30, 2012, noting net revenue of $37.7 billion, a big number, though down 3 percent year-over-year. The Palo Alto company raked in a $1.6 billion (with a 'B') profit in its second fiscal quarter and returned $601 million in cash to stockholders in the form of dividends and share repurchases, which is far better than what 8 percent of its workforce will receive -- pink slips -- as part of a multi-year restructuring effort.

In a separate announcement , HP outlined a multi-year plan that it expects to generate annualized savings of $3 billion to $3.5 billion by the end of 2014. Getting there, however, requires axing 27,000 employees, which accounted for 8 percent of HP's total workforce as of October 31, 2011. Those who receive a pink slip will be offered an early retirement program.

In addition to headcount reductions, HP plans to cut costs through supply chain optimizations, SKU and platform rationalization, go-to-market strategy simplification, and business process improvements, HP said.

"These initiatives build upon our recent organizational realignment, and will further streamline our operations, improve our processes, and remove complexity from our business," said Meg Whitman, HP president and chief executive officer. "While some of these actions are difficult because they involve the loss of jobs, they are necessary to improve execution and to fund the long term health of the company. We are setting HP on a path to extend our global leadership and deliver the greatest value to customers and shareholders."

HP said it plans to record a pre-tax charge of about $1.7 billion in fiscal 2012 related to its restructuring effort.

Image Credit: HP

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