Tuesday, 11 September 2012 22:20

HP increases layoffs to 29,000

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HP plans to sack even more people than it was previously announced. HP CEO, Meg Whitman has said that they will have to lay off 27,000 people to turn things around in the company, but apparently that was not enough and new numbers are saying that they will cut 2,000 more jobs. No explanations were given for this move, but it is possible that the increasing popularity of the tablet and smartphone market, where HP has nothing to offer, is scaring them. Additionally HP might feel that their personal computers just won’t be enough to compete with the new market. Don’t forget that HP is the largest PC maker in the world.

However they won’t just fire those people and hope for the best. HP plans to release their own line of tablets this fall, but Whitman said that they realize it will take them several years to get on the horse in this segment. They will focus more on business software and consulting, while they try to develop their tablets to a competing level. The main issue for HP is their huge $8.9 billion quarterly losses. They hope to fill that gap by cutting more employees.  Already around 8,500 have accepted early retirement offers, and it is expected that the rest will depart by the end of August 2013.
With the 2,000 extra jobs they cut HP believes they will save around $200 million annually. $3.7 billion should cover all planned departures. Even though their shares are hitting their lowest point in 8 years, they rose by 14 cents on Monday and now are $17.43. Will this be enough for HP to survive or will they need to let more workers go is yet to be seen. They still remain the #1 PC maker, but it is expected that Lenovo will surpass them in the last quarter of 2012.

[Ed – HP has tried the consulting track before and although it brings in money including the gravy that we all know as the support contract they just do not have the same presence as companies like Dell have in this segment. In most enterprise installations where HP has been brought in to consult, they usually won the contract due to price alone. In fact one contract I worked recently that was the only reason HP was brought into the shop. For HP to move forward they have to change almost everything from their Servers to their SANs. This cannot be a simple change in a single vertical, it has to be global. If HP can make a global change in their products and learn to present them to their customers properly they can win back a lot of business… the question is: will they be able to really make this leap?]

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Read 2874 times Last modified on Tuesday, 11 September 2012 22:53

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