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HP A “Basket Case” 30,000 Jobs Slashed As PC Sales Slump

HP A "Basket Case" 30,000 Jobs Slashed As PC Sales Slump

 

In Australia HP has been bleeding losses, as they struggle
to hold onto contracts, globally their PC division is also suffering, when
Lenovo launched back in November the Company reacted to the the new consumer
market entrant by slashing the price of their PC’s.

 

A major supplier to the Commonwealth Bank whose systems
crashed last week leaving millions without access to credit cards or able to
access their accounts the Company will shortly spit into two divisions.

 

About 10 percent of the jobs at the current HP, will be
eliminated, company officials said early this morning.

 

A year ago, Meg Whitman the CEO of HP who was in Australia
recently to meet with Commonwealth Bank executives announced she was cutting
Hewlett-Packard in two. This morning, she detailed job cuts expected at the
company.

 

“We’re looking forward to operating as two industry-leading
companies,” said Ms. Whitman, HP’s chief executive, speaking at a meeting of
financial analysts. “You’ll see us doing more pruning of businesses that don’t
fit.”

 

Ms. Whitman became the head of HP in 2011. As part of a
restructuring announced in 2012, 54,000 jobs have been cut at the company. The
new cuts are on top of that.

 

In November, Ms. Whitman will become the chief executive of
HP Enterprise, or HPE, which will sell things like computer servers, data
storage, software and services to business.

 

The other company, called HP Inc., will focus on printers
and personal computers. Ms. Whitman has said the division will enable both
businesses to react faster to changing markets.

 

The expected job cuts will result in a charge of about
$US2.7 billion, beginning in the fourth quarter.

 

“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,” Chief
Executive Meg Whitman said.

 

The total job cuts planned by the company as part of
Whitman’s multi-year restructuring plan was 55,000 as of October last year. HP
had more than 300,000 employees as of Oct. 31, 2014.

 

In the latest third quarter HP’s revenue from personal
computer and printer businesses, its largest, fell 11.5 percent. Enterprise services
division sales dropped 11 percent, while revenue at the enterprise group rose 2
percent.

 

Hewlett Packard Enterprise is expected to have more than
$US50 billion in annual revenue and report adjusted profit of $US1.85 to
$US1.95 per share in 2016, HP said on Tuesday.

 

The business is expected to report free cash flow of $US2.0
billion to $US2.2 billion in 2016, at least half of which is expected to be
returned through dividends and share buybacks.