HP's Massive Layoffs Won't Be Finished In October After All
Since first announcing the plan in 2012, HP has nearly doubled the number of jobs it is cutting - as of last month aiming to trim a total 45,000-50,000 people. That means cutting another 11,000-16,000 in the coming months.
HP told Wall Street analysts about the new layoff targets and date in May. On Monday, it confirmed this info in its official quarterly report filed with the SEC, saying.
"HP expects a total of 41,000 positions to be eliminated by the end of fiscal 2014, with the remainder to be eliminated in fiscal 2015."
As of April, HP had cut 31,400 positions, it said.
HP CEO Meg Whitman has repeatedly promised that HP will not do another big layoff once this one is complete. But it's not exactly clear exactly when HP will end the process.
On the quarterly conference call, analysts pushed Whitman to tell them if these numbers and dates were firm. Her answer was ambiguous:
I don't anticipate an additional program ... We went after the ones [job cuts] that were immediately obvious, but the longer I am here and this management team, is here the more opportunities we see.
If Whitman does end HP's layoffs in 2015, that will be a huge change for the company. It has been in a constant state of restructuring since 2008 after acquiring EDS for $13.9 billion, then-CEO Mark Hurd's signature deal. That deal doubled the employee count to over 400,000 people. HP trimmed 25,000 people from the EDS unit, renamed it HP Enterprise Services (HP ES), between 2008 and 2011, it said.
But the company is still huge. It employs about 331,800 employees worldwide.
Since 2008, HP has spent $8 billion on layoffs and other restructuring charges. The current round has cost it $4 billion, and it expects to pay out another $500 million if layoffs end at 45,000 people. The other $4 billion were on cuts associated with EDS, Palm and 3Com and other acquisitions, it said.
And HP ES remains a problem. Last quarter, HP reported that the unit had shrinking revenues and razor-thin margins. It brought in nearly $5.7 billion in revenue (down 7%, year-over-year) and $144 million in profits.
So, if in the coming months HP announces yet another expansion of its layoffs, no one should be shocked.