HP (HPQ) to Cut 9K Jobs: Sees $1B in Charges From Repositioning of Enterprise Service
Up)
Hewlett-Packard Co. (NYSE: HPQ) announced Tuesday that it will shed 9,000 jobs,while investing $1 billion in the next generation of its Enterprises Services business over the next three years, continuing its movement towards creating fully automated commercial data centers.
The world’s leading maker of PCs and printers, and the top technology company by revenue, said that it will execute the job cuts over a multiyear period as a result of the successful productivity gains and automation to further growth and to increase shareholder value.
The company added that roughly half of the $1 billion charge will be recorded in the third quarter and the rest by the end of fiscal 2013. HP said that upon completion of the change, it will see annual savings of $500 million to $700 million.
“Over the past 20 months, we focused on integrating EDS and improving profitability,” said Tom Iannotti, senior vice president and general manager, HP Enterprise Services. “Now that the integration is largely complete, we have identified significant opportunities to grow and scale the business. These next-generation services will enable our clients to benefit from the combined technology and services leadership that only HP offers.”
HP added that the commercial data centers will result in its corporate clients being able to run businesses with greater efficiency. The company is looking for ways to expand its more profitable businesses, as the PC market generally generates thin profit margins.
In 2008, HP purchased Electronic Data Systems, a rival company of International Business Machines Corp. (NYSE: IBM), while the company is also making a foray into the mobile handset market with the purchase of smartphone maker Palm Inc. (NASDAQ: PALM).
As of October 2009, the company employed roughly 304,000 workers.
Shares of Hewlett-Packard are up 15 cents to $46.16 in early market movement on Tuesday.
The world’s leading maker of PCs and printers, and the top technology company by revenue, said that it will execute the job cuts over a multiyear period as a result of the successful productivity gains and automation to further growth and to increase shareholder value.
The company added that roughly half of the $1 billion charge will be recorded in the third quarter and the rest by the end of fiscal 2013. HP said that upon completion of the change, it will see annual savings of $500 million to $700 million.
“Over the past 20 months, we focused on integrating EDS and improving profitability,” said Tom Iannotti, senior vice president and general manager, HP Enterprise Services. “Now that the integration is largely complete, we have identified significant opportunities to grow and scale the business. These next-generation services will enable our clients to benefit from the combined technology and services leadership that only HP offers.”
HP added that the commercial data centers will result in its corporate clients being able to run businesses with greater efficiency. The company is looking for ways to expand its more profitable businesses, as the PC market generally generates thin profit margins.
In 2008, HP purchased Electronic Data Systems, a rival company of International Business Machines Corp. (NYSE: IBM), while the company is also making a foray into the mobile handset market with the purchase of smartphone maker Palm Inc. (NASDAQ: PALM).
As of October 2009, the company employed roughly 304,000 workers.
Shares of Hewlett-Packard are up 15 cents to $46.16 in early market movement on Tuesday.
You May Also Be Interested In
- Intersil (ISIL) Board Approves Revision to Restructuring Plan, Will Cut Headcount by 11%
- Dow Chemical (DOW) Wins $2.16B in K-Dow Arbitration
Create E-mail Alert Related Categories
Corporate NewsRelated Entities
LayoffsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
