HP Announces Restructuring Plan: Up to 9,000 Jobs to Be Cutby Anton Shilov on October 4, 2019 8:00 AM EST
- Posted in
- Financial Results
HP late on Thursday announced plans to restructure the company in a bid to simplify its operations, cut costs, and increase dividends to investors. As a part of its fiscal 2020 restructuring push, the company will reduce its global headcount by anywhere from 7,000 to 9,000 employees in the coming quarters, which the company expects will allow it to cut annual costs by around $1 billion by the end of its fiscal 2022.
HP, which had about 55,000 employees worldwide as of October 31, 2018, intends to reduce its workforce by 7,000 – 9,000 employees (or by 13% – 16%) through a combination voluntary early retirements and layoffs. The downsizing and other restructuring charges will cost the company $1 billion: $100 million in Q4 of FY2019, $500 million in FY2020, and $400 million split between FY2021 and FY2022. Back in mid-2018, the company said it would cut 4,500 – 5,000 employees by the end of fiscal 2019, but it is not clear how many people the company employs now.
Meanwhile, large layoffs often mean eliminating certain projects and/or products. At this time, HP is not formally announcing which employees/divisions will be hit, but its CFO told Bloomberg that the bulk of savings will be made in corporate functions, back-office support, as well as feet-on-the-street salespeople. At this point, it looks like nothing drastic will happen to HP’s product roadmap, though the company promises ‘bold and decisive actions’.
Here is what Enrique Lores, incoming president and CEO, had to say:
“We are taking bold and decisive actions as we embark on our next chapter. We see significant opportunities to create shareholder value and we will accomplish this by advancing our leadership, disrupting industries and aggressively transforming the way we work. We will become an even more customer-focused and digitally enabled company, that will lead with innovation and execute with purpose.”
One of the main points of concern for HP is its printing business that has been declining for years as the world goes digital. The company has not made any formal promises about how it plans to restructure this unit, though it will certainly have to overhaul it somehow with it in the coming years.
Workforce reductions have been a long-running strategy for what used to be Hewlett Packard Co. and its successors HP and Hewlett Packard Enterprise. At the end of 2011, the combined company had 349,600 employees worldwide, and over the next several years Hewlett Packard eliminated well over 50,000 jobs. This was followed-up with the late 2015 spin-off of Hewlett Packard Enterprise, which reduced HP Inc's workforce to about 49,000 people as of October 31, 2016. Overall, with this latest round of job losses, what used to be Hewlett Packard Co. in late 2011 has now seen several major workforce reductions in the last eight years.
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Teckk - Friday, October 4, 2019 - linkSo, the restructuring will cost them 1 billion. They're going to save 1 billion also. Wow.
And that statement, 'lead with innovation and execute with purpose' - they really should tone down on those big words. They had no purpose till now?? 🙄
smartthanyou - Friday, October 4, 2019 - linkNot to be harsh, but the writing of this story is pretty bad. This is what HP actually said…
"Lores told analysts at the meeting the layoffs could yield annual savings of about $1 billion for the company. It will also take a $1 billion hit in charges related to the plan, including $100 million in the current quarter, $500 million in fiscal 2020 and the rest split between fiscal years 2021 and 2022."
So the 1 billion dollar saving is expected every year.
Teckk - Friday, October 4, 2019 - linkAh, ok.
Just wish that companies hire sensibly instead of firing on such a scale.
Anton Shilov - Friday, October 4, 2019 - linkThanks for the sharp eyes, Fixed!
Smell This - Monday, October 7, 2019 - link**...lead with innovation and execute with purpose...**
Oh. You mean the polar opposite of Carly Fiorina?
peevee - Friday, October 4, 2019 - linkMBAs have been trying to kill HP for two decades now, no wonder it implodes.
peevee - Friday, October 4, 2019 - linkI mean this:
"At the end of 2011, the combined company had 349,600"
"HP, which had about 55,000 employees worldwide as of October 31, 2018, intends to reduce its workforce by 7,000 – 9,000 employees"
Incompetent management is the biggest problem for public corporations.
haplo602 - Friday, October 4, 2019 - linkHP split in the meantime ... into HP Inc (the HP of today) and HP Enterprise ...
The main headcount went to HPE.
Eliadbu - Friday, October 4, 2019 - linkI don't know how accurate the given number in internet is but today the two entities have pretty similar headcount 60k for HPE and 55k for HP Inc. After the workforce cut we are talking about more pronounced headcount difference between the two.
peevee - Monday, October 7, 2019 - linkStill far cry from what it once was.