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HP to axe up to 30,000 jobs

Posted: 16 Sep 2015 ?? ?Print Version ?Bookmark and Share

Keywords:job cuts? layoffs? restructuring? enterprise?

Hewlett-Packard plans to cut another 25,000 to 30,000 jobs in its enterprise business as part of a corporate restructuring. The move comes as the company prepares to split into two separate businesses on Nov. 1, Reuters reported.

One will focus on its computer and printer business, while the other on hardware and service operations, which will be called Hewlett Packard Enterprise.

The U.S.-based company's latest employee reductions are part of a plan to save $2.7 billion in annual costs.

HP believes that the job cuts will result in a more competitive and sustainable structure for the new Hewlett Packard Enterprise. The company, however, did not specify when these layoffs would occur.

"We've done a significant amount of work over the past few years to take costs out and simplify processes and these final actions will eliminate the need for any future corporate restructuring," Chief Executive Meg Whitman told investors.

These job cuts are not the first under Whitman. In October last year, some 5,000 employees were eliminated, which brought the total number of people dropped under her helm to 55,000. Once the latest job cuts take effect, the figure will rise to at least 80,000.

HP has more than 300,000 employees.

Crawford del Prete, chief research officer with International Data Corporation (IDC), said over at Wall Street Journal that HP is trying to get the business's cost basis down as it separates into two listed businesses. The 76-year-old company is also trying to focus on higher-margin services such as data analytics, security and application modernisation.

HP's profits declined as its largest businesspersonal computer and printerfell 11.5 per cent in the third quarter. Sales from its enterprise services segment plunged 11 per cent, but its enterprise division recorded sales growth of 2 per cent.

Hewlett Packard Enterprise is seen to generate an annual revenue of more than $50 billion and a long-term sustainable operating profit margin between 7 per cent and 9 per cent, the company said.

- Stephen Padilla

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