HP reports declining revenue, details 27k layoffs
updated 05:58 pm EDT, Wed May 23, 2012
Net revenues slide to $30.7 billion
HP has reported its fiscal second-quarter financials, pointing to a slight slide in net revenues to $30.7 billion. Earnings per share fell to $0.80, slightly higher than the internal forecast of $0.68 to $0.71, however the company nonetheless confirmed plans to eliminate eight percent of its workforce.
Net profits showed a significant decline, falling 31 percent to $1.6 billion from $2.3 billion in the same quarter last year. The company reports a three-percent gain in enterprise hardware sales, however consumer revenues slid by four percent as the gains in desktop sales failed to counter the falloff in notebook shipments.
HP's printer group also posted lackluster numbers, as year-over-year revenues declined by 10 percent. Consumer hardware was the hardest hit, with a 13-percent drop in unit shipments.
The layoffs are expected to affect approximately 27,000 employees by the end of the company's fiscal-year 2014. Some staffers will be offered early-retirement packages, though the exact number of incentive offerings remains unclear.
The workforce reduction is expected to achieve annualized savings between $3.0 billion and $3.5 billion. Although the company has remained profitable, it argues that the layoffs are necessary to enable further investments in "people, processes and technology" as part of a broader restructuring plan, which is also said to include supply-chain optimization, strategy simplification and other improvements.
"These initiatives build upon our recent organizational realignment, and will further streamline our operations, improve our processes, and remove complexity from our business," said CEO Meg Whitman.
The company is said to be eyeing further investment in cloud, big data and security segments.
