HP to cut workforce by 27,000
Hewlett-Packard (HP) announced its decision to cut 27,000 jobs globally as it faces headstrong competition from hugely popular smartphones and iPad making it difficult for the company to push the sales of personal computers.
The reduction accounts for 8 percent of HP’s total workforce of about 350,000 employees. This is the largest layoff in its 73-year history. The company expects its job-cut procedure to be completed by October 2014.
The news did not come as a surprise as the word about this layoff had been revealed to the media last week. HP hopes to avoid as many layoffs as possible by offering early retirement packages.
Investors however, seem to be happy with the cutback decision.
The Palo Alto, California based company looks forward to saving approximately $3.5 billion yearly from these layoffs and other severance steps. Company CEO Meg Whitman plans to pump most part of the savings into product development and services that could help the company adjust to technological changes. These demands include mobile computing, software to offer high-speed internet connections etc.
“Work force reductions are never easy,” Whitman said in a conference call with analysts. “They adversely impact people’s lives, but in this case, they are absolutely critical to the long-term health of the company. Our goal is simple: a better outcome for the customers at reduced cost for HP.”