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HP To Cut 27,000 Jobs
Yahoo is shedding jobs, RIM is shedding jobs and now HP is joining the chorus of layoffs.
The PC and electronics manufacturer confirmed via an earnings call that it is slated to cut over 27,000 jobs. The cuts says the company, will save between $3 and 3.5 billion by the year 2014. HP of course employs well over 350,000 people worldwide and so this round of cuts amount to only 8% of its total workforce. In real terms that is still quite modest although this can’t be good news for 27,000 people.
That was pretty much the ‘bad news’ element of the earnings call because HP reported a modest reduction (3%) in earnings down to $30.7 billion. Although there was an actual reduction in earnings, HP did manage to beat out analysts who had predicted a worse performance.
Investors seem in the company seem to have liked the announced job cuts because shares in the company actually rallied on the news. The savings made from the job cuts will be invested in restructuring activities across the company and many analysts expect at least another 3,000 people to lose their jobs.
CEO Meg Whitman has taken the approach that Yahoo CEO Thompson has taken. Gone are the days when innovation was the ticket out of slumping sales and poor stock performance. Now it’s all about cuts, cuts and more cuts.
Whether this quasi-austerity approach will be sustainable is anyone’s guess. For now though, 27,000 people will have to find employment somewhere else.