HP Ready to Slash 30,000 Jobs en Route to Split
Hewlett-Packard (HP) is an American international information technology company. It is headquartered in Palo Alto, a charter city which means “tall tree” in the Spanish language. The city is located in Santa Clara County in California, United States of America. The company was initially founded by William “Bill” Redington Hewlett and David “Dave” Packard inside a car garage and they started the operations with testing of electronic equipment.
The company develops and offers a varied range of hardware machinery in addition to software and similar services to its consumers, who range from small and medium-sized businesses (SMBs) to giant enterprises. The company also caters to government, health, and education segments.
The company has also decided to slash down its employee count by 25,000-30,000, or in other words around 10 percent of the total workforce.
The decision follows the early year announcement of the company to cut 55,000 jobs as it has planned to divide the company into two entities.
The existing liabilities and losses will come under the Hewlett Packard Enterprise (HPE), and it is splitting from the PC and printer business.
The company has estimated the savings of $2.7 billion (£ 1.76bn) in annual costs in regard to the proposed job cuts, although the execution of the plan is going to cost the company $ 2.7bn.
In a meeting with Wall Street analysts, the chairman and also the chief executive of the company, Meg Whitman shared: “We’ve done a significant amount of work over the past few years to take costs out and simplify processes and these final actions will eliminate the need for any future corporate restructuring”.
In the vision of Ms. Whitman, the proposed fresh structure will enable HP Enterprise to focus mainly on business enterprises and government agencies, and the focus of the printing and PC division will be on the consumer market.
‘Low-Cost Locations’: an Introduction
At present, the company employs over 300,000 employees.
And as per the estimate of Charles King, an analyst from consultancy firm Pund-IT located at the Silicon Valley, “The number is sadly larger than some people might have expected, but I think it’s a reflection of how much trouble HP has been having with its services”.
“I ‘am frankly not sure if HP is finished with the layoffs”.
The company has not declared any figure related to the expected cuts, but an integral part of the company’s plan is to bring about an effective change in the temperament of the workforce.
Also, the company has anticipated an increase of around 18 percent by the year 2018 in the percentage of workers which the company describes as “low-cost locations”. The current fraction of 42 percent will reach the 60 percent mark by 2018.
The company has sluggishly moved through the last decade amidst fluctuating demands since the customers are slowly but steadily moving away from desktop computers.
On the other hand, there is no denying the fact that Hewlett Packard is still a top contender among the world’s leading technology companies, with expected revenues in excess of $50bn in the current financial year.
The company which was founded in a car garage in Palo Alto, California in the year 1939 indeed has come a long way and is regarded as the guiding light of what is known today to the world as Silicon Valley.
But things started to change and the company’s revenue started to decline after a string of pricey and much-criticized acquisition which includes Compaq in the year 2002 for $ 25bn, second on the list is the consultancy firm EDS which was acquired for $ 14bn in the year 2008 and was followed by the acquisition of Autonomy in 2011 for $ 11bn.
Subsequently to add more to the company’s declining position the company also lost its ranking as the leader of PC supplier to Lenovo. This happened in the year 2012.
The prices of the company’s shares that soared high during the dot.com boom in the year 2000 followed by two more boosts in the year 2007 and 2010 respectively, lost its shine and the value has dipped around 60 percent since then.