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Another round of job cuts for HP

Posted: 22 May 2012 ?? ?Print Version ?Bookmark and Share

Keywords:job cuts? PC sales? IT services?

Hewlett-Packard Co. is reportedly considering to slash 8 o 10 percent of its workforce or around 25,000 to 30,000 employees. The job cuts are said to reduce costs for the company as well as continue HP's restructuring plans and help the company contend with the decreasing demand for computers and services.

Most of the cuts, around 10,000 to 15,000 will be from HP's enterprise services group. The unit, which sells a range of information technology services, has been struggling with decreasing profitability, said sources from the company who choose to remain anonymous. The sources also added that the plans are not final and may still change.

Since taking office in September, HP CEO Meg Whitman has been trying to turnaround the company's declining sales that led to the ouster of her predecessor, Leo Apotheker.

HP's PC sales have continued to drop as consumer demand for tablets, such as Apple's iPad and Samsung's Galaxy Tab, continue to grow.

The company has also been slow to adapt to the shift toward cloud computing, away from the IT services HP provides.

Brian Marshall, an ISI group analyst, has already commented on an earlier research note that it was possible that HP will reduce its workforce. "This would enable investments in strategic, higher grown areas," Marshall said. Eliminating 18,000 jobs could result in savings of about $1.2 billion and add 50 cents to annual per-share earnings, he estimated.

The overall reduction and additional cost savings throughout the company could result in savings that reach billions of dollars, according to a source from the company.

Last March, Whitman announced that the company is combining its PC and printing divisions, which ended speculations of a spin-off of HP's PC unit.

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