A not so happy new year is in store for employees of HP as the firm has revealed that it needs to eliminate an additional 15% of its workforce before October 2014.
In its 10k filing with the SEC (US Securities and Exchange Commission), the company put it down to continued market and business pressures. The latest round of cuts comes only a few weeks after the company announced it would be cutting 1100 jobs in the UK as part of a 'restructuring' plan.
Ian Tonks, Unite national officer, said: "For the last five years HP has been addicted to a culture of job cuts in the UK to such an extent that its highly skilled workforce has little faith in the way the company is being managed and will be going forward."
Redundancy = Reinvention?
HP is attempting to remake itself as a cloud service provider while still relying on revenue from PCs and servers, which are two sectors in which its interests are under pressure.
HP has seen a decline in both notebook PC and desktop PC sales. Revenue from notebooks declined 7.8 per cent while desktop revenue fell 2.9 per cent in 2013. Its consumer business has struggled due to price pressure from budget PC suppliers and the BYOD (Bring Your Own Desktop) trend in businesses and companies.
CEO Meg Whitman, who took over the company in 2011, has repeatedly mentioned that HP is in a long-term turnaround since announcing the restructure in 2012. With its multiple forays into various markets, including phablets and mobile, though, HP seems to be grasping for portfolio profitability.
In a research note based on the company's fourth quarter results, Sanford Bernstein Senior Analyst Toni Sacconaghi said that HP continued to "struggle with improving its margins and share together, despite substantial cost cuts — particularly in its enterprise business." Cutting jobs could lose the company technical expertise it would be hard fought to regain.
