Hewlett Packard Enterprises prrovided more details on its cloud partnership Microsoft (Photo : Reuters)
About 25,000 to 30,000 Hewlett Packard employees are bound to lose their jobs as the tech giant announced on Tuesday a planned spinoff resulting in axing of positions under its enterprise division.
USA Today reports that the axing would save the company, which has also been suffering from lower sales of PCs due to weak demand, $2.7 billion in yearly cost. The number is about 10 percent of HP's total workforce of 302,000, although at its peak, HP's global payroll was 350,000 workers in 2011.
The 30,000 is in addition to a 55,000 job cut previously announced by HP.
Despite the cut, HP CEO Meg Whitman said the company remains the third-largest tech employer and would continue focusing on PCs and printers. By Nov. 1, the split would become final and Whitman would become CEO of Hewlett Packard Enterprise.
In a meeting on Tuesday with analysts, Whitman admits, "It has been a bumpy road. There's no question about it," quotes The Wall Street Journal. By spinning off, the companies would be leaner and could better compete in new markets such as cloud computing as companies move away from big PCs and computer networks.
HP is trying to enter the higher-margin services like data analytics, security and application modernization, away for outsourcing which has low margin, according to Crawford Del Prete, chief research officer of industry research firm IDC.
Among the reasons for the downsizing of the 75-year-old Palo Alto-based firm is the competition from Oracle, IBM, Lenovo and other computer firms. As a result, HP's sales dipped to $111.5 billion in fiscal 2014 from $127.2 billion in fiscal 2011. A year ago, there was a boom in PC sales, but experts warned it would not last that long.
