Struggling Hewlett-Packard to cut up to 16,000 more jobs
By Finfacts Team
May 23, 2014 - 9:58 AM

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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

HP (Hewlett-Packard Co) plans to cut up to 16,000 jobs as the struggling tech giant flounders in response to changing market trends.

The electronics giant that is known for PCs, computer servers and printers and has been synonymous with the development Silicon Valley, said Thursday it would cut an additional 11,000 to 16,000 jobs on top of 34,000 positions it previously announced would be eliminated as part of a multiyear restructuring plan.

At the midpoint of that range, the new cuts would reduce an additional 4% from HP's workforce of about 317,500 employees.

HP is one of Ireland's largest foreign employers with plants in Leixlip, Co Kildare and Ballybrit in Galway. It employs about 4,000.

News of the job cuts coincided with results for the fiscal second quarter, revealing a fall revenues by 1% from the same period a year ago to $27.3bn but profit improved.

"I'm pleased to report that HP's turnaround remains on track," said Meg Whitman CEO, in a statement.

"We're gradually shaping HP into a more nimble, lower-cost, more customer- and partner-centric company."

For the quarter ended April 30, HP posted net income at $1.27bn, or 66 cents a share, up 18% from the year-earlier level of $1.1bn, or 55 cents.

PC sales rose 7% mainly due to business sales; Server sales fell 2% and printer sales were off 4%.

HP has been struggling with falling PC sales as consumers shift towards devices such as tablets and smartphones.

Whitman has focused on shifting the firm's focus to computing equipment and networking gear for business clients.

The Wall Street Journal said Whitman sought to portray the unexpected job cuts as an opportunity to further streamline a company that had grown bloated over the years through multiple acquisitions.

"I'm not at all disappointed, I think it's the natural course of what makes sense in a turnaround of this size and scale," she said. The restructuring, along with continued investments in growth areas such as cloud computing, analytics software and networking technology, would set up the group "as a force to be reckoned with," she said.

However the Journal said some analysts wondered if Whitman was trying to get ahead of potentially weakening demand by announcing the new job cuts.

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