“HP absolutely needs to fix enterprise services, PCs, and servers across both its companies”, Anand Srinivasan, an analyst at Bloomberg Intelligence, told Bloomberg.
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HP’s redundancies had been expected for some time, and come after the company just finished sheeding 58,000 jobs in an earlier round of redundancies.
HP is looking to cut even more of its workforce in conjunction with a November. 1 corporate split intended to make the company more agile and efficient. HP expects to save about $2.7 billion annually as a result of the imminent cuts.
Shares of Hewlett-Packard (HPQ – Get Report) are gaining by 2.55% to $27.80 in pre-market trading on Wednesday morning, as the company declares its latest step in a plan to cut $2.7 billion in annual costs. It is also hoped that the soon to be spun off ES business unit will achieve about $2 billion in gross annualized cost reductions.
Crawford del Prete, chief research officer with global Data Corporation (IDC), said over at Wall Street Journal that HP is trying to get the business’s cost basis down as it separates into two listed businesses. HP Inc. will be focused on the more consumer markets such as PCs and printers. Forty-two percent of employees in the unit of HPE called enterprise services now work in low-priced locations and executives said they plan to increase that figure to 60% by 2018. Most of those jobs will be eliminated on the HP Enterprise side. If the scenario looks grim, industry experts caution that HP might not be fully done with job cuts and job restructuring along with layoffs could continue well into 2016, as the company attempts to re-establish its grip over the every evolving tech industry. The last will hold firm’s printer and personal computer business and HP Enterprise will focus in infrastructure, software, services and cloud. In a Re/Code report, he said that by the end of HP Enterprise’s fiscal year 2018, only 40 percent of the group’s workforce will be located in high-cost countries.
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The company expects to generate $3 billion in sales relating to cloud computing this year, Whitman said, and sees that growing by 20 percent year-over-year for the next three years.
