To put this in perspective it is 10-12% of HPE’s workforce. It will help reduce annual running costs by US$2.7 billion on an annual turnover of about $50 billion. The jobs will mainly be lost from call centres and other service centres in developed countries. HP plans to automate many of the jobs, and build out positions in countries like India and Costa Rica. The company will also take a one-time $2.7 billion restructuring charge and will have to pay out workers.
Meg Whitman, HP’s CEO has already downsized by 55,000 jobs over the past couple of years as it was caught with the massive shift from PCs to mobile devices. Interestingly she will lead the new slimmer, trimmer HP Enterprise unit. She will also be chairman of HP Inc. Dion Weisler, who currently runs the printing and PC business at HP, will be chief executive.
HP Enterprise will also skill up its sales force to increase the amount of technology consulting and cross-selling. This is typically the kind of work done by companies like IBM, while the old HP made lower margin, but high-volume sales of individual products.
The information came from an Financial Analysts update here.
To be fair to Meg Whitman HP’s woes go well back before her time starting with the $25 billion acquisition of Compaq and 30,000 jobs shed then. Since then CEO’s alike have made questionable acquisitions and judgements.
“We’re looking forward to operating as two industry-leading companies. You’ll see us doing more pruning of businesses that don’t fit,” she said.
HP Inc., which will have about 50,000 employees, will reduce its headcount by 1,200 employees in 2016, and a total of 3,300 employees by the end of 2018.
The recent HP concentrates on two markets – consumer and business/government. Over the past 12-24 months I have seen a real turnaround from reliable yet boring products to many leading edge, some may say bleeding edge products like its new ‘Sprout’ computer ecosystem that deserves to win – its one of the most innovative devices to come out of HP in a long time.
Its consumer notebooks are now trendy again and come in colours, styles and formats that the market wants – long gone are the silver, over engineered, heavy behemoths of the past.
Despite everything, the HP of today is one of the world’s largest technology companies.