They called it speculation when the first reports came out last month but, while announcing the last quarter's financial results, HP has confirmed plans to cut as many as 27,000 jobs worldwide, as part of a long-term restructuring plan.
Between layoffs and retirement offers, HP will cut about eight percent of its global workforce before the end of the 2014 fiscal year. In a statement, the company says it expects to save US$3.5 billion and reinvest the majority of that money in the company.
It is not yet known whether the cuts will affect the New Zealand market. Contacted by Reseller News, HP says it is yet to announce plans regarding specific locations. However, the company says the cuts will likely affect most regions. "We do expect the workforce reduction to impact just about every business and region. Beyond this, we unfortunately don’t have any additional information to share at the moment," says HP spokesperson Stephanie Aye.
This will be the biggest restructure in HP's 73-year history and is believed to be the third largest ever in the industry. In 2008, the company had already cut 25,000 jobs. Back in March this year, the company announced the merger of its PC and printers divisions, in what it called an effort to drive profitability and growth. At the time of the announcement, some analysts questioned HP's reasons for the move, with Gartner analyst Mark Fabbi saying "moving the deck chairs around isn't enough".
HP's net income for the second quarter of the year, which ended April 30, was down to US$1.6 billion, less than 31 percent over the same quarter last year. Revenue was down 3 percent, at US$30.7 billion.