HP to lay off about 27,000, profit slides 31 percent
By Poornima Gupta
SAN FRANCISCO (Reuters) - Hewlett Packard Co plans to lay off roughly 27,000 employees or about 8 percent of its workforce over the next couple of years to jumpstart growth and save up to $3.5 billion annually, sending its shares 11 percent higher.
The company said the layoffs would be made mainly through early retirement and would generate annual savings of $3 billion to $3.5 billion as it exits fiscal year 2014, when the layoffs are expected to the completed.
The world's No. 1 personal computer maker, which employs more than 300,000 people globally, also said on Wednesday that it had a 31 percent decline in second-quarter profit and a 3 percent decline in revenue, compared with a year ago.
The results, however, were better than Wall Street expectations.
Layoffs "adversely impact people's lives, but in this case, they are absolutely critical to the long-term health of the company," Chief Executive Meg Whitman said.
"This is broad based," she said in an interview. "By design, it will touch all of HP."
Whitman said a third of the layoffs would be in the United States. The company will take a pretax charge of $1.7 billion in fiscal 2012 related to the layoffs.
Whitman plans to boost spending on research and development, especially in printing and PCs, with the savings from the cost cuts. Continued...