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Hewlett-Packard set for big changes as IT giant prepares to split

American IT giant Hewlett-Packard has announced plans for significant job cuts, as it prepares to restructure over the coming months. HP is also set to be divided into two separate companies before the end of 2015.

The company’s chief executive Meg Whitman addressed the press this week, with figures revealing that HP is planning to reduce its workforce by 25,000 to 30,000, adding to the 54,000 jobs that have been cut in the last three years as the firm pushes to streamline its operations.

The proposed job losses would mean HP will have shed 100,000 employees in a decade, a notable figure given that the entire firm’s workforce is estimated to be around 300,000 in total. The number of job losses are reminiscent of the big telecoms and IT boom and bust cycles of the late 1990s and early 2000s.

Many of HP’s staff reductions will come from their corporate hardware and services operations, which is to be rebranded as Hewlett Packard Enterprise (HPE) later this year. The new company will operate separately from HP Inc, which is focused on the printer and PC marketplace.

Plummeting sales of PCs are perhaps what has hit HP hardest over recent years. Meanwhile, competitors have made massive gains in the mobile and tablet markets, while Apple’s tech market share has skyrocketed over the past five years.

HPs streamlining and split will be undertaken with the aim of putting its new HPE enterprise business in a more advantageous position as an independent entity.

Whitman and her fellow management executive team at the Silicon Valley firm have been fighting hard over recent years to turn the company’s fortunes around. A large percentage of its services workforce has already been moved to lower cost offshore facilities.

On the restructuring and changes of direction that have already taken place, in addition to the latest plans, Whitman insisted this week, “This has been a bit of a moving target. It has been a bumpy road, no doubt about it. We are conscious there have been a number of restructuring plans for this business. While we need more restructuring, I have the highest confidence I’ve had in four years that we will get there.”

Whitman will lead HPE after the split and has also warned analysts to expect modest growth rates for the company, more closely aligned with global GDP than the booming tech enterprise market. Meanwhile, in the quarter which ended on 31st July HP revenue from the PC and printer side of its business – its biggest concern – fell by over 11%.

Featured Image – Source / CC 2.0

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John Hampton

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