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  (Source: Jason Mick/DailyTech LLC)
Chinese unit is expected to be spared; remaining workers are pressured to "work harder"

Soon, approximately 27,000 workers at Hewlett-Packard Comp. (HPQ) will be out of the job -- almost 8 percent of the company's total staff of 324,000.

HP surprised with better than expected earnings for fiscal Q2 2012, announcing revenue of $30.7B USD, more than the analyst consensus of $29.9B USD.  Profit checked in at $2.3B USD ($1.05 USD/share), more than the $1.02 USD/share analysts predicted.  Optimism in the stronger-than-expected performance was tempered by estimates for the next quarter, which were lower than analysts expected, amid a slump on sales of printers, data-center equipment, and services.

The HP layoff program will be gradually implemented as part of a restructuring that wraps up by October 2014.  The layoffs will be the largest in the company's 73-year history.  News of the painful layoffs leaked last week.

HP has not revealed a precise timeline for when the job cuts will occur, within the 2012-2014 restructuring windows.  However, sources indicate that most of the cuts will likely come in the U.S. and Europe, while the company's Chinese unit -- a major growth target -- will largely be spared.

Meg Whitman
Meg Whitman is thinning the herd at HP, hoping to get the same amount of work out of less engineers. [Image Source: towleroad]

Remaining employees will have to pick up the slack for their departed co-workers under former eBay, Inc. (EBAY) CEO and new HP CEO Meg Whitman's vision for the company.  Still a bit of a silver-lining to this cloudy news is that Ms. Whitman did indicate that some of the $3.5B USD saved would be reinvested in working towards restoring HP Labs to its former glory.

Long a bastion of electronics industry research, HP Labs has continued to do novel work, such as inventing the memristor -- a long theorized circuit element, which could lead to new cheaper, more power-efficient kinds of storage.  However, the cutbacks have forced the star institution to operate on a shoestring budget, raising questions of whether HP will be able to continue to attract top talent.  The situation is so bad at HP Labs, according to The New York Times, that researchers are forced to use pirated software for their day-to-day work.

HP's deep cuts are bad news for its employees -- and U.S. engineers in general who will face greater competition in the jobs market.  However, they're hardly out of place in a post-recession U.S., where many companies have learned that they can boost profits by squeezing the same amount of work out of fewer employees.  That philosphy has helped to stifle job recovery, even as GDP growth has slowly come back to life post-recession.

Sources: Market Watch, Bloomberg, USA Today

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RE: Buy American?
By CountZero on 5/23/2012 5:54:07 PM , Rating: 2
Some of them will be backfilled with lower cost employees to paraphrase their statement.

Also the majority of the ~$3.3B in savings will be reinvested in R&D to support cloud, networks, and data but no word on geographies for the reinvestment.

My take away is that cuts are coming, lots of them, nearly everything not in China will be impacted, engineers are less likely to feel the brunt if they are part of enterprise R&D but no one is 100% safe.

"A politician stumbles over himself... Then they pick it out. They edit it. He runs the clip, and then he makes a funny face, and the whole audience has a Pavlovian response." -- Joe Scarborough on John Stewart over Jim Cramer

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