HP cuts 14,500 jobs for $1.9bn a year save
by Nikola Strahija on July 20th, 2005 Hewlett-Packard is to shed about 10 percent of its workforce and hopes that this action will save US$1.9 billion a year. HP will also link sales and marketing efforts more closely to business units and is set to eliminate the Customer Solutions Group, which sold to enterprise customers.
The most people are getting fired in management, only few in research and development, and the company is going to save additional $300 million in cutting down US retirement benefit programmes. Most of the staff cuts will be made in central support functions such as human resources, finance and IT.
HP won't benefit fully from the savings until 2007, but in its 2006 fiscal year it expects to save between $900 million and $1.05 billion, it said and about half of those savings will be turned into operating profit.
HP's financial performance has been uneven in recent quarters. The company appears to have stemmed the losses in its PC and server groups, but those divisions are not as profitable as management and shareholders would like. HP has its printer business to thank for most of its recent profits, but the company trimmed positions from that group earlier this year in order to further reduce costs.
