Hewlett-Packard sees 30,000 job losses

  • 16/09/2015
The new company will focus on cloud computing, servers, storage, networking and other technology services
The new company will focus on cloud computing, servers, storage, networking and other technology services

Hewlett-Packard says its upcoming corporate split will lead to job losses of 25,000 to 30,000.

"These restructuring activities will enable a more competitive, sustainable cost structure for the new Hewlett Packard Enterprise," said Meg Whitman, the HP chairman and chief executive who will head the software and enterprise services unit after the split.

The US tech giant is splitting into two separate units, one with a focus on personal computers and printers, and the other on software and enterprise services.

The new enterprise unit is seeking some US$2 billion in annual cost reductions, according to the outlook provided to analysts, plus US$700 million in savings related to the spinoff.

"Hewlett Packard Enterprise will be smaller and more focused than HP is today, and we will have a broad and deep portfolio of businesses that will help enterprises transition to the new style of business," said Whitman.

"As a separate company, we are better positioned than ever to meet the evolving needs of our customers around the world."

The new company will focus on cloud computing, servers, storage, networking and other technology services, with the other unit HP Inc keeping the personal computer and printer operations.

Hewlett Packard Enterprise will have more than US$50 billion in annual revenue and "will be focused on delivering unrivalled integrated technology solutions" to companies, according to a company statement.

The split, set to be completed in late October, will take place as a tax-free distribution of shares to HP's stockholders.

It breaks up a company formed in the 1930s by Stanford University graduates Bill Hewlett and Dave Packard to make electric equipment, and whose Palo Alto garage has been dubbed "the birthplace of Silicon Valley".

HP has been undergoing a massive reorganisation to cope with the move away from traditional personal computers to mobile devices.

The move by Hewlett-Packard, the world's second-largest PC maker and one of the biggest US tech firms, is based on the belief that tightly focused firms perform better.

AFP