Shares of Hewlett-Packard Co. rallied on Wednesday after the firm reported job cuts of up to 30,000 to reduce expenses.
These cuts will be made by the end of next month, and will affect employees worldwide, although exactly where they’ll be drawn from wasn’t specified.
HP, which has struggled for years in a declining PC market, also said it would cut up to 33,300 jobs over the next three years, mostly in its enterprise business.
“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”, she said. Management noted that HP Inc. will have a net debt position of $2.3 billion with triple B flat credit rating.
Most of [the laid off employees] – about 60 percent – will by 2018 be replaced by workers in one of five HP offices around the world: Costa Rica; Manila, the Philippines; Sofia, Bulgaria; and Bangalore and Chennai in India. At that time, HP’s CEO, Mark Hurd was intent on pushing HP towards enterprise IT services.
Hewlett-Packard Company (NYSE:HPQ)’s stock had its “strong-buy” rating restated by Scotiabank in a research report issued to clients and investors on Thursday, StockTargetPrices.com reports.
On October . 6, 2014, HP announced that it was splitting into two companies – HP Inc., which would take over the tasks relating to personal computers and printers, and Hewlett Packard Enterprise, focusing on providing computer services to companies. The Company designs its solutions to supply foundation, in the areas of security, cloud, freedom and big data, by leveraging the breadth of its own offerings as well as the strengths and capabilities of its individual business units. Larry Ellison, the longtime CEO and now chairman of Oracle, was never interested in HP’s computers and printers, but he could be interested in the enterprise division that sells servers, storage hardware and networking services, Enderle said.
Tech analyst Roger Kay, president of Massachusetts-based Endpoint Technologies Associates, said it was unclear where the company would cut. Scotiabank’s price target suggests a potential upside of 23.32% from the stock’s previous close. HP has about 2,500 employees in Palo Alto and about 2,000 in Sunnyvale, according to economic development data from those cities. The last time HP notified the state was in July, when it cut 65 workers.
“The number is sadly larger than some people might have expected, but I think it’s a reflection of how much trouble HP has been having with its services”, said Charles King, analyst at the Silicon Valley IT consulting firm Pund-IT.
The job cuts will save the company $2 billion annually, Stonesifer said, with another $700 million in savings from real estate shutdowns. The analyst day has been well-received by investors. Contact Matt O’Brien at 408-920-5011.