HP to Cut 7% of Workforce

Hewlett-Packard has announced plans to cut about 27,000 jobs in its most recent round of job cuts. The technology giant continues to struggle with streamlining its PC and services businesses and adapting to a stagnant PC industry. The massive layoff would account for about 7 percent of HP’s global workforce which currently employs nearly 350,000 workers worldwide. As the PC industry continues to underperform, the company has suffered double digit losses in both PC sales in general (down 15 percent in Q4 2011) and in consumer computer sales (dropping 25 percent in Q4 2011).

HPs once sterling printing arm has also fallen off over the past several years. In 2011, printing division profits fell 10 percent while sales were flat. So poorly has the printing business performed that a large portion of the planned job cuts are to come from the unit. In March, HP merged its printing division into the broader “personal systems” divisions which includes PCs. As an indicator of the company’s desperation, it had even considered spinning off its business-critical PC division but eventually decide to keep it.

But as the world continues its march toward mobile technologies, PCs are being left behind and HP has fallen behind with introducing viable tablets or smartphones. While CEO Meg Whitman can act to shrink and realign the organization, major prospects for the future of the company may not arise without drastic changes. HP began its downward spiral in mid-2010 when it cut 9,000 jobs and jettisoned its webOS lineup. But that attempt failed to work, casting doubt that the current strategy may again fail to return the company to health. Profits at HP are expected to fall 26 percent this quarter with a continued downward trend expected throughout the rest of the year.