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HP says to cut up to 30,000 more jobs in enterprise business

Wednesday, September 16, 2015 - 06:43
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Meg Whitman, chief executive officer of Hewlett-Packard, speaks during an interview in Las Vegas.PHOTO: BLOOMBERG

[SAN FRANCISCO] Hewlett-Packard Co, which is splitting into two listed companies later this year, said it expects to cut another 25,000 to 30,000 jobs in its enterprise business as part of its efforts to save US$2.7 billion in costs.

The 76-year-old company is separating the faster-growing corporate hardware and services operations, to be called Hewlett Packard Enterprise, from its computer and printer businesses.

The expected job cuts will result in a charge of about US$2.7 billion, beginning in the fourth quarter, HP said in a statement on Tuesday. "We've done a significant amount of work over the past few years to take costs out and simplify processes and these final actions will eliminate the need for any future corporate restructuring," Chief Executive Meg Whitman said.

The total job cuts planned by the company as part of Ms Whitman's multi-year restructuring plan was 55,000 as of October last year. HP had more than 300,000 employees as of Oct 31, 2014.

In the latest third quarter HP's revenue from personal computer and printer businesses, its largest, fell 11.5 per cent. Enterprise services division sales dropped 11 per cent, while revenue at the enterprise group rose 2 per cent.

Hewlett Packard Enterprise is expected to have more than $50 billion in annual revenue and report adjusted profit of US$1.85 to $1.95 per share in 2016, HP said on Tuesday.

The business is expected to report free cash flow of US$2.0 billion to $2.2 billion in 2016, at least half of which is expected to be returned through dividends and share buybacks.

The stock fell 1.4 per cent to US$26.73 in extended trading on Tuesday.

REUTERS