HP will lay off up to 16,000 more employees than it planned to lay off previously as part CEO Meg Whitman’s turn-around plans meant to return the company to growth.
HP has been on a restructuring kick for the past two years, laying off employees, reshuffling department heads and adjusting its product portfolio to reflect changes taking place in the IT market.
The Palo Alto, California-based IT giant announced the restructuring plan in 2012, including a 34,000-person workforce reduction. On Thursday, however, along with its second-quarter earnings report, the company said it would increase the target number of eliminated positions by 11,000 to 16,000.
About 41,000 employees will have left HP as part of the restructuring by the end of 2014, Whitman said on the company’s earnings call with analysts, and the remainder will be let go in 2015.
The layoffs are not limited to specific divisions or geographical regions. “It will be across almost all the business units and across all the geographies,” Whitman said.
HP reported $27.3 billion in revenue for the second quarter – down 1 percent year over year. Net income was $1.3 billion – up 18 percent from the same period one year ago. Earnings per share were $0.66 – up 20 percent year over year.
Shares drop after accidental earnings leak
HP accidentally released its earnings report on its website one hour before the scheduled release time on Thursday afternoon. Its shares dropped by 2% following the accidental leak, but regained some of that loss in after-hours trading after the official announcement.
After a decline between about mid-2010 and late 2012, in which period the company’s shares went from more than $50 per share to about $12 per share, its share value has gone up and down but generally stayed on an upward trajectory. HP shares were trading at close to $32 per share after hours on Thursday.
Whitman satisfied with turn-around progress
Whitman said the turn-around was on track and sounded optimistic about the future. “I believe we’re well positioned as we enter the second half of 2014,” she said.
Besides optimizing operations, HP is focused on innovation, the CEO said, highlighting a number of product initiatives the company kicked off during the first half of the year that she said were critical elements of its innovation agenda.
These were the Helion cloud computing initiative launched earlier this month, the partnership with Foxconn to go after the hyperscale server business announced in April, the launch of a converged-infrastructure system for SAP HANA in March and kick-off of the OpenNFV program, targeted at the telco market for Network Function Virtualization.