Since 2012, when HP first announced that it would be undergoing a massive multi-year layoff, HP has eliminated 48,000 from its workforce on its way to eliminating 55,000 by October, CFO Cathie Lesjak told Wall Street analysts last month.
On November 1, HP will separate into two companies and with that, HP will in all likelihood have more cuts, HP CEO Meg Whitman indicated during an interview Bloomberg Television’s Emily Chang.
When asked if HP’s huge layoffs will continue with the split, Whitman replied:
There will be some more restructuring costs as we continue to be effective and lean and competitive on the world stage. This is now a global economy and we have to be competitive. We’re very thoughtful about this but what I know is if we don’t get our cost structure right this won’t be the happy ending that we all know it can be.
This layoff has grown from an initial target of 27,000 to 55,000.
Although Whitman once said that when HP’s completes this multi-year layoff she wouldn’t do another big layoff, that was before the company opted to split into two. And she’s been hinting that she would backtrack on that promise for months now.
HP has actually had a constant string of layoffs since 2008, when it swallowed EDS and doubled its headcount. But even after chopping nearly 50,000 jobs, HP is still an enormous company. As of October, 2014, it employed 302,000. In the last two quarters, it has eliminated 2,800 and 3,900, respectively Lesjak said. By our count that makes headcount still somewhere near 295,000.
With revenue still shrinking across the board, and a transition as big as splitting apart, it’s not surprising that cutting costs is a big focus.
In addition to more “restructuring costs” after the split, Whitman also indicated that she would be shifting more jobs offshore in the unit that swallowed EDS, known as HP Enterprise Servies. It has become HP’s most troubled business unit and she promised to hit operating profit margins of 7 to 9%.
Here is Whitman discussing this on Bloomberg TV.
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