HP fires 9% of the Company

Hewlett-Packard - HPQ is considering cutting 27,000 jobs, or 8 percent of its workforce, to reduce costs and help the company contend with ebbing demand for computers and services.
CEO Meg Whitman, is seeking to reverse the growth slump that led to the ouster of her predecessor, Leo Apotheker. The company’s PC sales are dropping as consumers favor tablets, such as Apple Inc.’s iPad, and it has been slow to adapt to the shift toward cloud computing, away from the IT services Hewlett-Packard provides...

This “would enable investments in strategic, higher growth areas.” Eliminating 18,000 jobs could result in savings of about $1.2 billion and add 50 cents to annual per-share earnings, he estimated. Michael Thacker, a spokesman for Palo Alto, California- based Hewlett-Packard, declined to comment. Shares of Hewlett-Packard rose to as high as $22.27 after Bloomberg reported the changes, and gained 3 cents to $22.06 the close in New York. The stock has dropped 14 percent this year.

"HP expects to reinvest savings in each of its business segments to strengthen their ability to stay ahead of customer expectations and capitalize on growing market trends. HP will invest in research and development to drive innovation and differentiation across its core printing and personal systems businesses, as well as emerging areas. It will also invest in marketing, sales productivity and tools that simplify the customer experience and make it easier to do business with HP. Services will invest in accelerating service capabilities in the high client value areas of cloud, security and information analytics by enhancing HP intellectual property. Services will also strengthen its industry orientation and continue to differentiate its service offerings through quality and innovation delivered to clients. Combined, these activities are expected to shift the portfolio to a more profitable mix of higher-growth services. Additional work in lean process methodologies is expected to better serve clients and increase overall efficiencies. Software will invest to speed development in the areas of security, big data and the management of application lifecycle and infrastructure solutions, both on premise and in the cloud. It will also further leverage the capabilities of Autonomy and Vertica across the entire HP portfolio. Enterprise Servers, Storage and Networking will invest to accelerate its research and development activities to extend its leading portfolio of servers, storage and networking. Together these assets create a Converged Infrastructure which is the foundation for top client initiatives such as cloud, virtualization, big data analytics, legacy modernization and social media. As a result of this restructuring, HP expects to record a pre-tax charge of approximately $1.7 billion in fiscal 2012 that will be included in its GAAP financial results for that period. Through fiscal 2014, HP expects to record additional pre-tax charges approximating $1.8 billion that will be included in its GAAP financial results for the appropriate periods."