HP to lay off thousands this week, reports say
- 18 July, 2005 08:02
HP may cut thousands of jobs this week in the first large-scale restructuring by its new CEO, Mark Hurd, according to published reports.
Hurd, who took the helm at HP in March following the removal of Carly Fiorina, has said he would take steps to reduce costs at the company.
HP plans to announce the restructuring on Tuesday, according to a report in the online edition of the Wall Street Journal, which cited an unnamed source familiar with the plans. The paper was unable to provide details of the restructuring and said the timing of the announcement may change.
Spokespeople for HP did not immediately return calls for comment.
Some Wall Street analysts expect anywhere from 5000 to 25,000 employees to be laid off, according to the Journal report. HP's enterprise computing business, which has done less well than that of some of its rivals, appears particularly susceptible to job cuts, the paper said.
Hurd, who was recruited from NCR, has already made some changes at HP. In June, he split its printer and PC groups, which had recently been merged, into two separate divisions, undoing one of the last major changes made by Fiorina. HP laid off 2000 staff when those groups were merged.
When it reported its second-quarter financial results in May, the company suggested other layoffs would follow. It said at the time that it would incur costs of US$100 million over the current quarter related to workforce reductions.
Its second-quarter results were slightly ahead of projections. The company reported revenue of $US21.6 billion, up 7 per cent from a year earlier. Net income came in at $US1.2 billion, slightly ahead of analyst forecasts.
Hurd declined to discuss his plans for HP in detail at the time, saying that would be premature.
"At this stage, I have more work to do to get further beneath the operations of the company," he said at the time. "What's clear to me already, even at this early stage, is that hard work lies ahead of us if we are to get HP's overall financial performance where it needs to be."
HP rival IBM said in May that it planned to reduce its workforce by up to 13,000 employees, mainly in Europe.