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HP to drop 3,000 staff in fiscal '05
And for just $236m
HP will finish laying off close to 3,000 workers by October, the company said today in a regulatory filing.
The printer company dropped 1,600 workers by April 30 with many of its staffers taking voluntary severance packages. Another 1,400 employees will be let go by the end of HP's fiscal year in October. These moves forced HP to take up to $236m in charges through its first two fiscal quarters of 2005, according to a filing with the US Securities and Exchange Commission.
The layoffs may be the beginning of a long firing cycle for HP once new CEO Mark Hurd firms his agenda. The King of Ink warned in May that some of HP's underperforming units would have to lower their breakeven point, leaving layoffs as an obvious out for management. A prominent analyst estimated that HP could cull 15,000 workers in its bid to boost earnings.
Hurd gained a fearsome reputation for his efficient, cost-cutting moves at NCR, which included offshoring work, shrinking support staff and offering retirement packages to longtime employees. Such moves will not go over well at HP where many employees already feel beaten down by previous CEO Carly Fiorina's tenure.
HP's purchase of Compaq resulted in thousands of workers losing their jobs and plenty of bad blood between rival corporate cultures. Hurd must try and revive morale while still improving HP's operations in the eyes of Wall Street. Not an easy task. ®
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