Hewlett-Packard (HPQ) will shed an additional 16,000 jobs from its employee rolls, adding to the 34,000 it's already cutting, in what chief executive Meg Whitman called the last phase of the company’s 2012 restructuring plan.
In an analysts’ conference call following release of the vendor’s ho-hum quarterly results, Whitman said that HP must run more efficiently to continue its turnaround. To get there requires another 3 percent to 5 percent job cuts by the end of next year, which Whitman said would be enacted across the board and in all geographies. HP said the restructuring job cuts in total will save the company about $1 billion in operating costs by fiscal year 2016.
If the employee firings at HP sound like they just keep on coming, it’s because they do. This latest job loss revision is the third upward refiguring of the number of employees who will be let go to make HP run more smoothly, in a wholesale company overhaul first announced some two years ago.
Whitman blamed HP’s mergers and acquisitions for ballooning the vendor’s employee headcount. In a CNBC interview, she said, “These acquisitions never got integrated quite the way they should have,” adding, “There still [are] pockets, big pockets of inefficiencies."
Efficient may be becoming Whitman’s watchword for HP. In her CNBC interview, she mentioned in a number of times, stressing how important it is for HP to streamline to meet the growing competition in its strategic markets.
And, in a Re/code interview, Whitman said the job cuts have “to do with an increase in the opportunity to run the company more effectively and efficiently. ... If you just look at how we do things, it’s not as efficient as it needs to be, whether it’s in marketing or sales operations or frictionless e-commerce. And by the way, it clarifies decision-making so that we can move much more quickly and nimbly. The longer we’re here the more clarity we achieve.”
Of the job losses, Whitman said, “This is it for the 2012 program. We will take the final charge in 2014. We expect 41,000 to leave during the year and a few more will leave in 2015.”
Would a pared back headcount have improved HP’s recently concluded FQ2 performance? HP reported net earnings of $1.3 billion, an 18 percent bump from a year earlier, on a 1 percent sales slide to $27.3 billion. Sales fell 4 percent in HP’s printing unit, tumbled 14 percent in business critical systems and 7 percent in enterprise services, while PCs, of all things, rose 7 percent from the same period last year.
For its FQ3 2014, HP projected GAAP diluted net per share earnings will come in at 59 cents to 63 cents a share.