Hewlett-Packard is planning to lay off 2,000 more employees than it forecast in May as part of a corporate restructuring that will run through the end of its fiscal 2014 year.
In its 10-Q filing Monday, HP said it now expects to cut around 29,000 jobs, up from its earlier estimate of 27,000. HP expects the job cuts and its early retirement program to cost about $3.3 billion through fiscal 2014, and last month the company recorded a $1.7 billion charge related to these moves, according to the filing.
So far, HP has only eliminated about 3,800 positions in its restructuring campaign, which suggests CEO Meg Whitman and her team will be facing some difficult decisions over the next two years. Whitman and crew will also need to keep employee morale from flagging despite the ever-present specter of layoffs.
In an interview with CRN last month, John Solomon, senior vice president of Americas sales for HP's Printing and Personal Systems division, acknowledged this challenge. "Obviously, that's top of mind for the leadership team," he told CRN. "The biggest thing we can do is actually win in the marketplace."
HP's merging of its PC and printer businesses in March stands to impact a significant number of employees, including those in the channel, but Solomon said the integration of the two groups is on track.
"We've taken a lot of cost out and actually have gotten the majority of that behind us," Solomon said. "Now we're taking the cost savings and re-investing it in a stronger product portfolio, more money in the channel and driving demand."
In the 10-Q, HP said the restructuring of its Enterprise Services business, which began in June 2010, will cost around $1 billion in charges during its current fiscal year. As of July 31, HP had cut 7,300 of the 8,000 Enterprise Services positions initially forecast, according to the filing.
HP last month wrote down $8 billion from its Services division in a move stemming from the $13.9 billion acquisition of EDS in 2008.
Whitman has said it could take years for HP to fully recover, and HP shares are currently at their lowest level in a decade. Solomon said Whitman has been urging her business leaders to refocus on the fundamentals in order to get HP back on track.
"There are certain tenets that made this company great in the past and will make it great in the future. That's focused on products, leadership, our people and customers, and transparency in how we communicate," he said. "We feel these are the key foundations to getting our mojo back."
PUBLISHED SEPT. 10, 2012