HP President and CEO Meg Whitman last night announced the 8 percent cut to HP’s 350,000 employees in an effort to reinvest an annual saving of US$3.5 billion per year.
“These initiatives build upon our recent organisational realignment and will further streamline our operations, improve our processes and remove complexity from our business,” Whitman said in the statement.
“While some of these actions are difficult because they involve the loss of jobs, they are necessary to improve execution and to fund the long-term health of the company. We are setting HP on a path to extend our global leadership and deliver the greatest value to customers and shareholders.”
The largest cutback in the California-based company’s 73-year history will be met with multiple business adjustments according to the statement.
“HP expects to achieve additional savings from non-headcount cost reductions, including supply chain optimisation, SKU and platform rationalisation, go-to-market strategy simplification and business process improvement,” HP’s statement said.
“These moves are expected to yield significant improvements in efficiency and customer service during the next several years. HP expects to use the savings to boost investment in innovation around its three areas of strategic focus: cloud, big data and security.”
The changes are as a result of growing competitiveness of tablets and smartphones in the computing industry with HP’s quarterly earnings growth down 44 percent and its quarterly revenue growth down seven percent in 2012’s first quarter.
HP is yet to confirm the where the layoffs will take place but is offering an early retirement plan for some axed employees.