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HP job cuts head towards the 50,000 mark as company tackles cost

Cliff Saran

A further 16,000 jobs are set to go at HP, as the company continues to slash its workforce amid a restructuring initiative that began in 2012.

Overall as many as 50,000 jobs are set to go by 2015.

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CFO Cathy Lesjak said: "We now expect approximately 45,000 to 50,000 people to leave the company under our announced 2012 restructuring program. This is up from our previous estimate of 34,000."

In a transcript of HP’s second-quarter 2014 earnings call, posted on the Seeking Alpha financial site, CEO Meg Whitman said: "No company likes to reduce their workforce but the reality is that HP must be manically focused on continuous improvement in our cost structure. We believe this further alignment along with the expected [industry] investment in innovation and infrastructure set us up as a force to be recon with in the rapidly shifting market where we compete."

HP posted second-quarter net revenue of $27.3 billion, down 1% from the same period in the previous year. In its personal systems division, commercial revenue increased 12% and consumer revenue declined 2%. Total units were up 10% with desktops units up 6% and notebooks units up 6%.

Whitman said: "Overall, we’re seeing a slowing market contraction and signs of stabilisation, particularly in commercial PCs. This is coupled with support from a refresh of an aging installed base and the expiration of Windows XP."

Industry standard server revenue was $2.8 billion, up 1% year-over-year. Whitman said HP was seeing growing interest in its low-powered Moonshot product. "We continue to see good customer interest in Moonshot with over 100 beta customers and engagements through our discovery labs and over 40 partners in the programme."

HP’s high-end server business, Business Critical systems, saw revenue decline 14% and storage revenue was down 6% over the prior years. Its networking business grew 6%.

Enterprise Services revenue was down 7% while software revenue was flat year over year. Enterprise Services revenue was down 7% and revenue in its Enterprise Group revenue fell 2%.

As Computer Weekly has previously reported, HP signed a deal with Foxconn in May to grab the share of the growing cloud server business market and to cater to the increasing demands of high-density servers for hyperscale computing. Through the agreement, Foxconn will manufacture HP’s hyerscale servers, including Moonshot servers.

Later this year HP will introduce Helion, which brings together HP’s cloud products and support services under a unified portfolio. It will be made available via HP’s partner network as well as in its datacentres.


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