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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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Professionalism.
By drycrust3 on 5/23/2012 6:04:35 PM , Rating: 2
quote:
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.

I am amazed that Whitman thinks 8% of her employees are idle. If they were, then tossing them out would only be a positive impact.
On the other hand, if, as I believe, all HP employees are working pretty well at their limit, then downsizing by 8% while recruiting for the HP Labs (which means "everywhere else" has even more of a reduction than the 8%) can only have a negative impact. One outcome of this "negative impact" is a reduced profit, another is a reduced market share, another is falling share price (making HP a potential takeover target ... ), but the most important one is that the work of that 8+% will fall onto the shoulders of the remaining staff, who are already working close to their physical and mental limits.
I think the respect the Board of Directors do get from their staff is only because of the staff's professionalism.




RE: Professionalism.
By Ammohunt on 5/23/2012 11:04:47 PM , Rating: 3
Ask yourself what has HP produced in the last 10 years? they sunk their Unix server line with itanic which was a huge cash cow for them. Their PC server line is ok but that market is saturated by dell and others. They missed the Linux bandwagon; their Enterprise software is not competetive they got out of the tablet market what have they innovated recently? where are they as compared to IBM? Oracle?


RE: Professionalism.
By drycrust3 on 5/23/2012 11:44:55 PM , Rating: 2
I don't know of any scale of technological capability, but 10 years behind at today's rate of technological development is the more than 1000 years behind at the start of the 20th Century.


RE: Professionalism.
By Zuul on 5/24/2012 4:17:49 PM , Rating: 2
This article doesn't mention it, but the majority of those people being let go were close to retirement and given early retirement packages.

Lots of large companies are full of people in their mid/late 50's who are simply coasting because they know they will eventually be packaged out.

This gets them off the books now and opens up room for the younger guys to move up.


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