Hewlett-Packard fires 30,000 more workers - 100,000+ cuts in decade
Hewlett-Packard (HP) — an icon of Silicon Valley — announced Tuesday that it would fire 30,000 more workers bringing the total to over 100,000 job cuts in a decade.
The company is planning to split into two companies on 1 Nov with Hewlett Packard Enterprise selling servers and software to business that is competing with rivals renting computing power from Amazon, Microsoft and IBM, among others. The PC and printer focused HP Inc. will return cash to shareholders while expanding into new markets such as 3-D printing.
The split is hoped to enable the management of each to better focus on their respective markets. “When we were one company we were always trying to fit all of the pieces into an overall strategy,” Meg Whitman HP CEO said on Tuesday.
HP has a current payroll of about 302,000 and 55,000 jobs have been cut since Whitman became chief in mid-2014. A further 25,000 were fired in 2008 by Mark Hurd, a predecessor.
Carly Fiorina who was the HP chief from 1999 to late 2005, is running for the Republican nomination for president by highlighting her business experience — rising from the secretarial pool — but the 2001 takeover of Compaq Computer, a maker of PCs that had become commodity products, created dissension within the company and Fiorina was fired after the company's share price plunged by a half in 2005.
“When you manage in tough times, when you lead in tough times, sometimes tough calls are necessary, and yet we took that company from about $44bn to almost $90bn,” Fiorina said to The Des Moines Register editorial board. “We took the growth rate from 2 percent to 9 percent.”
Andrew Ross Sorkin wrote in The New York Times last month: "Here’s the problem: Those numbers she is referencing aren’t Hewlett-Packard’s profit. They are the company’s revenue. And if you make enough acquisitions — especially one the size of Compaq — you can inflate your revenue figures. You can also buy growth."
The Palo Alto, California post-split Hewlett Packard Enterprise will grow in line with global GDP Whitman said Tuesday because of slowing emerging markets and the proportion of the services workforce in lower-cost offshore centres will rise from 42% to 60%.
The job cuts aimed at saving $2.7bn a year, will result in a charge of about $2.7bn, beginning in the fourth quarter, HP said.
HP has about 4,000 employed in Ireland.
Stanford University classmates Bill Hewlett and Dave Packard founded Hewlett-Packard (HP) in 1939. The company's first product, built in a garage, part of Packard's rented house on 367 Addison Avenue in Palo Alto, California, was an audio oscillator — an electronic test instrument used by sound engineers. One of HP's first customers was Walt Disney Studios, which purchased eight oscillators to develop and test an innovative sound system for the movie 'Fantasia.' The simple one car garage became the HP workshop and a little shack out back became Bill Hewlett's home.
In 1989, California named the garage "the birthplace of Silicon Valley" and made it a California Historical Landmark. Photo HP Museum