HP Blames The Market For 5000 More Job Cuts

Hewlett-Packard has firmly quashed any remains of festive cheer with a depressingly familiar start to the new year – announcing 5000 more jobs are to go, on top of previously announced layoffs.

The news emerged in an HP filing with the US Securities and Exchange Commission (SEC). There is no word yet on  how many of these cuts will be in the UK, where the company announced a five percent staff cut in December 2013, amounting to the loss of 1,124 jobs.

Long-standing layoffs

Recent HP staffing history is grim: in May 2012 the company confirmed long standing rumours and officially announced that it would axe 27,000 jobs, as part of its “2012 Plan”. Then in September 2012, HP increased the number of positions to go to 29,000 staff, as part of radical changes designed to turn round the fortunes of the PC maker.

But now in its latest regulatory filing, the company has added another 5,000 positions it will axe, bringing the total number of layoffs to 34,000, or 11 percent of its 317,500 strong global workforce. There is no word yet on the number of British jobs that will be lost in the latest round of cuts.

“On May 23, 2012, HP adopted a multi-year restructuring plan (the “2012 Plan”) designed to simplify business processes, accelerate innovation and deliver better results for customers, employees and stockholders,” said the company in its filing.

Market Pressures

“Due to continued market and business pressures, as of 31 October, 2013, HP expects to eliminate an additional 15 percent of those 29,000 positions, or a total of approximately 34,000 positions, and to record an additional 15 percent of that $3.6 billion (£2.2bn) in total costs, or approximately $4.1 billion (£2.5bn) in aggregate charges,” said HP.

For the last couple of years, HP CEO Meg Whitman has attempted to change the fortunes of HP, which has been badly hurt by the decline in the PC sector. Whitman wants to lessen HP’s reliance on the PC market (HP is the second-largest PC maker in the world, behind Lenovo) and instead increase its enterprise offerings. In October, Whitman struck an optimistic tone with investors and analysts, following growing market disquiet over the length of HP’s recovery.

And in November momentum for Whitman’s multiyear turnaround plan seemed to be increasing, after HP posted a profit of $1.4 billion (£863m) for its fourth quarter. This was a significant improvement over the $8.9 billion (£5.5bn) loss in the same year-ago period, when it was hit by the $8.8 billion (£5.4bn) charge against its acquisition of Autonomy. Revenues meanwhile hit $29.1 billion (£17.9bn), but this was a 3 percent drop over the same period in 2012.

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