HP revises restructuring figures; now cutting 29,000 jobs

HP revises restructuring figures; now cutting 29,000 jobs

Summary: Computer maker HP will cut 29,000 jobs -- an increase on its first estimate -- as the firm continues to cut back on costs as it falls down the PC building market share rankings.

SHARE:

HP has said it will cut more of its global staff than first thought, upping the figure from around 27,000 to 29,000 employees.

The world's largest computer maker said in the 10-Q quarterly filing with the U.S. Securities and Exchange Commission (SEC) that it will, "eliminate approximately 29,000 positions in connection with the 2012 Plan through fiscal year 2014."

Screen Shot 2012-09-10 at 13.22.42
HP's latest datacentre in Western Sydney, Australia. Credit: HP.

HP said in May that it would cut 27,000 jobs -- roughly 8 percent of its global workforce -- and plow the $3--3.5 billion it says it will save into research and development. The cuts will be spread over the next two years, but overall R&D spending will increase from the 3 percent of revenue it currently stands at. 

The filing notes that the multi-year restructuring plan -- dubbed the "2012 Plan" -- was aimed to "simplify business processes, accelerate innovation and deliver better results for customers, employees and stockholders." In a nutshell: cut the wheat from the chaff and clamber on to the market share rankings to keep ahead of its global competitors, notably up-and-coming Lenovo.

Also in the filing, HP said it expects charges of around $3.7 billion through the end of HP's fiscal 2014 calendar, with $3.3 billion relating to workforce reductions, and $400 million on "other items," such as datacenter consolidation.

The computing giant has already recorded a $1.7 billion charge during its 2012 third-quarter as a result of its restructuring plans.

HP said in the filing that the company has already shed 3,800 jobs -- around 7 percent of the revised 29,000 figure -- as of the end of July 2012. Employees from the ailing enterprise services group, which manages datacenters and consultancy to partners, are taking the brunt of the cuts. 

Last month, HP swapped its executives in the enterprise services unit, which accounts for more than a quarter of HP's total sales, and took an $8 billion charge in the process.

HP remains the world's largest computer maker by shipments, according to Gartner figures, recording 13.06 million shipments in the second-quarter -- despite a 12 percent decline year-on-year. Lenovo is poised to take the first-place slot in the coming weeks once September quarterly PC shipments figures are released.

Topics: Hewlett-Packard, IT Employment, PCs, Tech Industry

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

6 comments
Log in or register to join the discussion
  • Death spiral?

    Are the bean counters directing the a death spiral? Standard American business practice.
    gertruded
    • Multinational business practice...

      But don't worry, HP (like others) will still get taxpayer-funded subsidy (and even bailouts), more articles will come out saying how HP 9and others) continue to avoid paying taxes as well, and more offshoring and putting out cheaply made garbage will continue. The economy is saved, w00t.
      HypnoToad72
  • The genious of

    the American way of capital is to quickly destroy money-losing enterprises and free up the resources for a company that can use it effectively. Sufficient profit is defined by a return that at least matches the return you could get by investing elsewhere. Note that the money can be used anywhere, and probably not in the same type of venture.
    Tony Burzio
  • Unsurprising

    It's not a shock that HP isn't doing all that well considering how poor many of their products are and how the way that they've attempted to "innovate". Every HP device that I've used in the last few years has had some sort of major issue. Laptops that run too hot and have loud fans, printers that cost so much to put out a page that you may as well do all your printing at Kinkos, bloated driver packages that nag you constantly and slow down your system, special update managers that peg 100% of system resources, failing motherboards, etc. People end up giving me HP products to send to recycling after only a year or two because something fails and they can't figure out what to do with it. Not to mention how badly they botched webOS (at a time when real innovation would have delivered a large slice of the tablet market - look at how this is now working for Amazon). HP doesn't deserve the top spot. I'm surprised that they've kept it as long as they have.

    The sad part is what this means for their employees. Hopefully they'll find jobs at a company that's better to work for (I knew a couple of people who worked at HP around 2000-2002 - what they described was a textbook dysfunctional company).
    ecclesia
    • Our experience echoes yours exactly, @ecclesia

      A laptop that burned out twice in its first year. (First time, just a hard drive; second time, hard drive plus motherboard. Thank goodness for backups and skill in using them, but tedious as you may know.) And printers? We've learned, (1) never bother to buy an upper-end HP model: inner component quality's the same; and (2) don't build up a stock of cartridges, as a replacement printer will inevitably use a different size, and those boogers are expensive! It's a shame to think of all the "e-waste" generated by these increasingly disappointing products.
      fjpoblam
  • Sell Off The PC Business

    There are only two companies making huge profits from every PC sold: Microsoft and Intel. Everybody else either gets peanuts or, like HP, is now just losing money. Desktop PCs are a dead-end business. The innovation has moved to mobile. If HP wants to become a dynamic company again, it should move into that.
    ldo17