Business World

Saturday 21 October 2017

HP on verge of slashing 25,000 from workforce

Slump forces tech giant with 4,000 Irish staff to cut costs

Hewlett-Packard (HP) is considering cutting as many as 25,000 jobs, or 8pc of its worldwide workforce, to reduce costs and help the company contend with ebbing demand for computers and services, Bloomberg reported last night.

The company has about 4,000 Irish employees with more than three-quarters of them working in Leixlip, Co Kildare. One of the Leixlip plant's main functions is manufacturing components for HP's inkjet printers, while other functions include research, sales and support.

Meg Whitman, chief executive officer since September, said in March that she'll combine the PC and printing divisions, ending deliberations to spin off the PC unit. She has also said she'll step up investment in research and development and take steps to shore up Hewlett-Packard's balance sheet.

The number of employees to be cut worldwide includes 10,000 to 15,000 from Hewlett-Packard's enterprise services group, which sells a range of information-technology services and has been beset by declining profitability, Bloomberg reported.

Ms Whitman is seeking to reverse the growth slump that led to the sacking of her predecessor, Leo Apotheker.

The company's PC sales are dropping as consumers favour tablets, such as Apple's iPad, and it has been slow to adapt to the shift toward cloud computing, away from the IT services Hewlett-Packard provides.

"Hewlett-Packard could make the difficult decision of announcing a workforce reduction," Brian Marshall, an analyst at ISI Group, wrote in a research note earlier this month. This "would enable investments in strategic, higher growth areas." Eliminating 18,000 jobs could result in savings of about $1.2bn (€944,959), he estimated.

Michael Thacker, a spokesman for Hewlett-Packard, declined to comment.

Some of the cuts to Hewlett-Packard's workforce of 324,600 may come through early-retirement packages, Bloomberg reported.

Hewlett-Packard is working with management consulting firm McKinsey.

Ms Whitman said in March that she'll combine the PC and printing divisions, ending deliberations to spin off the PC unit. She has also said she'll step up investment in research and development and take steps to shore up Hewlett-Packard's balance sheet.

Besides tussling with Apple, Hewlett-Packard is also vying with companies including IBM, Oracle and Cisco in the market for hardware, software and services for large corporations.

Hewlett-Packard is scheduled to report second-quarter earnings next week. (Bloomberg)

Irish Independent

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