Thread: HP printing out 14,500 pink slips

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HP printing out 14,500 pink slips

By Michael Singer

Story last modified Tue Jul 19 05:54:00 PDT 2005


Facing increased pressure to break out of its No. 2 position, Hewlett-Packard has been forced to reinvent itself once again.
As part of its strategy, the computer and printer maker said Tuesday that it will lay off 14,500 workers, or about 10 percent of its staff, under a restructuring plan designed to bring the company's costs in line with those of competitors like Dell and IBM.

HP said the broad changes will save it about $1.9 billion each year starting in the summer of 2006. In its current fiscal year, the company expects to save between $900 million and $1.05 billion.


News.context

What's new:
HP announces a massive restructuring including layoffs of 14,500 employees.

Bottom line:
The layoffs are designed to save HP more than $1.9 billion each year in operating costs. HP has laid off about more than 3,000 employees so far this year. In April, 1,900 employees took advantage of a voluntary severance plan in the imaging and printing division.

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Although the job cuts announced Tuesday will be felt throughout the company, the majority of staff reductions will come from sales and from support functions, such as IT, human resources and finance, Palo Alto, Calif.-based HP said.

"Our goal is to create a simpler and nimbler HP," Chief Executive Mark Hurd said during a conference call Tuesday, noting that the changes will be staggered over the next 18 months.

The restructuring is the most significant move Hurd has made since he replaced Carly Fiorina less than four months ago.

Employees are not expected to be immediately notified of their status but may get a greater sense of their place at the printer and computer maker sometime later in the week--after HP executives convene for more high-level discussions. Executives met over the weekend to nail down the number of layoffs and to decide which departments would be most affected, according to a source close to the company.

The announcement was telegraphed so far in advance that some employees had begun referring to the restructuring and layoffs as "The Big One."

HP currently has 150,000 employees, the same as it did 18 months after completing its acquisition of Compaq Computer.

As previously expected by some analysts, HP is also putting a freeze on its pension and retiree medical-program benefits for employees who do not meet defined criteria based on age and years of company service, starting in January 2006. Instead, the company said it will boost its matching contribution to most employees' 401k plans to 6 percent from 4 percent.


Mark Hurd
CEO, HPThe $1.9 billion in expected annual savings is split between $1.6 billion in labor costs and $300 million in benefits expenses.

HP said it expects to spend about $1.1 billion over the next year and a half on the restructuring, excluding a $100 million restructuring charge announced earlier this year.

The company said it will also dissolve its Customer Solutions Group, a standalone division that had been responsible for sales to corporations, small and medium-size businesses and public-sector customers. Instead, HP said it will merge its sales teams into the company's three main business units. Senior sales positions will be added to each business segment.

At the same time, Michael Winkler, 60, will retire from his position as executive vice president of the group, the company said. Winkler had been trying to retire for some time, after nearly 10 years at HP and Compaq and more than 35 years in the industry, a representative with HP said.

Gee, this is just what Carly did.

What's next?

Outsourcing jobs to India?

Oh, wait. Carly did that, too.

You can put HP on corporate deathwatch.

Facing increased pressure to break out of its No. 2 position, Hewlett-Packard has been forced to reinvent itself once again.
As part of its strategy, the computer and printer maker said Tuesday that it will lay off 14,500 workers, or about 10 percent of its staff, under a restructuring plan designed to bring the company's costs in line with those of competitors like Dell and IBM.

"Bring the company's costs in line with those of competitors like Dell and IBM." But wait, don't they mean Lenova, who bought IBM, you know the company from China? Gee, Bushey Boy, I think you should have STOPPED THAT ONE!! And, what's wrong with being NO. 2 anyway?

Although the job cuts announced Tuesday will be felt throughout the company, the majority of staff reductions will come from sales and from support functions, such as IT, human resources and finance, Palo Alto, Calif.-based HP said.

Gee...aren't those the really good jobs, the HIGH TECH jobs Americans will do?

"Our goal is to create a simpler and nimbler HP," Chief Executive Mark Hurd said during a conference call Tuesday, noting that the changes will be staggered over the next 18 months.

"Simpler and nimbler". Oh My God, they've hired a Poet to run our nation's NO. 2 electronics firm.

As previously expected by some analysts, HP is also putting a freeze on its pension and retiree medical-program benefits for employees who do not meet defined criteria based on age and years of company service, starting in January 2006. Instead, the company said it will boost its matching contribution to most employees' 401k plans to 6 percent from 4 percent.

Oh sure, pick on your old people, you evil wackos!!

The $1.9 billion in expected annual savings is split between $1.6 billion in labor costs and $300 million in benefits expenses.

Yeah....Simpler and Nimbler = "Slice and Dice". Get Ready to "Brace and Race" to the bottom. By the way, did our Poet at HP happen to mention HIS pay cut? Oh...he's probaby waiting for his BIG ONE when the stock bid comes in from China.

HP's History.

Note to HP Board of Directors: You fools. You didn't need to lay off your people to rise to No. 1. You needed to block the sale of IBM to China and tell your talented work force you are going to lead them to new innovations, new ideas, new products and allocate the research and development funds they need to achieve that. That's how you build and sustain successful companies in the United States. Maybe they didn't teach you that in your "Rhyme Classes"? You've apparently hired a "Poet That Don't Know It" either. "Too bad, so sad".

And, I will add one more suggestion to Judy's diatribe!!! OFFER CUSTOMER SERVICE. THat is what is sorely lacking in the other industries in the field. Dell USED to have SUPERB customer service. I guess you could say that it still does to the extent that you CAN call 24 hours a day IF, and only IF, you want to speak with an Indian whom you can barely understand. I know I've called 10 times in an hour and hung up until I got an American. That was a couple of years ago. Now, even that doesn't work. And, what are we going to have right here in North Carolina?? DELL.

I saw the problem with Hewlett Packard years ago. I bought one of their printers and, after a short warranty period, they charged $25 a session for technical support. That was when I absolutely drew the line and decided that was the first and last HP printer I would ever have--or ANY HP product. If I can't get tech support FREE, I won't buy the product.And, I would PREFER that support to speak ENGLISH.

H-P said the majority of the job cuts will come in support functions, such as information technology, human resources and finance.

Count Floyd gets the cigar! "Support Functions" I guess that means the customer service dept is moving to New Delhi! It's easy to tell, when talking to customer service, use big words and talk very fast. It confuses someone that has just learned the language even though the companys are busy teaching the reps to loose their accent. I have already emailed HP and told them if I call customer service and get Bombay, Epson, Cannon, anybody but HP here I come! I though the BIG tax cuts for the rich was suppose to stop this, or did it just provide the companies with the extra money to do it? HHHMMMMM......