Hewlett-Packard Cuts 27,000 Jobs Despite Profitable Performance

After reading the communiqués and statements from the head of HP, you would think that the group was losing huge sums of money. Alluding to another sharp drop in the group’s earnings, Meg Whitman said that she is “cautiously optimistic”, saying that the decrease in computer sales to the general public was offset by the professional market. “Our results appear to be stabilizing,” but “there is still a lot of work left to be done,” mainly to improve performance in printer sales and services. Conclusion: “Reducing staff by 8%, cutting costs, and rationalizing are necessary in order to save money.”

But what exactly is the problem that is calling for such drastic measures? Net earnings of 1.59 billion dollars for sales revenue topping off at 30 billion. The shareholders are whining because their dividend will be a bit less than 1 dollar per share. In their mind, the situation justifies the 27,000 lay-offs. With 9,000 employees to be laid off this year, the target will likely be reached in 2014 and should “lead to annual savings between 3 and 3.5 billion dollars come the end of the fiscal year (end of October) 2014.”

It’s the largest wave of job cuts at HP since 2008, when almost 25,000 people were laid off after the acquisition of the services company, EDS.