HP to slash 27,000 jobs by 2014

ISTANBUL - Anatolia News Agency

An HP logo is seen outside Hewlett-Packard’s Belgian headquarters.

Hewlett-Packard plans to cut 27,000 jobs, or eight percent of its global workforce, by 2014 in a major restructuring effort for the computer giant.

The world’s biggest personal computer maker said the move was part of “a multi-year productivity initiative designed to simplify business processes, advance innovation and deliver better results for customers, employees and shareholders.” The restructuring is expected to generate annualized savings of $3.0-3.5 billion by the end of the 2014 fiscal year for HP, which is struggling amid a move to mobile devices and tablet computers.

 The savings will mostly be reinvested back into the company and boost investment in areas such as cloud computing, big data and security, and other segments “that offer attractive growth potential.” The workforce cuts will include an early retirement program and “will vary by country, based on local legal requirements and consultation with works councils and employee representatives, as appropriate.” The company will also seek savings in other ways including improvements in its supply chain and simplifying some business processes.

 “While some of these actions are difficult... We are setting HP on a path to extend our global leadership and deliver the greatest value to customers and shareholders,” said Meg Whitman, HP president and chief executive.

The move came as the Palo Alto, California-based firm reported a 31 percent drop in profits in its second fiscal quarter to $1.6 billion. Revenue in the period fell three percent from a year ago to $30.7 billion.