Analysts Expecting HP To Cut 30,000 Jobs
Hewlett-Packard (HP) is expected to announce big layoffs for its workforce, potentially cutting up to 30,000 jobs.
Media reports say, citing unnamed sources, that when HP posts its second-quarter results, the company will be announcing its plans to eliminate 25,000 to 30,000 jobs, which is 10 percent of its workforce.
HP is expected to present both its quarter results and a restructuring plan today after the market closes.
Some analysts expect HP to post a profit of 91 cents a share, on revenue of $29.9 billion, according to a survey by FactSet Research. During the year-earlier period, HP reported a profit of $1.24 a share, on revenue of $31.6 billion.
The company’s stock price has dropped 25 percent since its last earnings report in late February, which is when it reported that profits dropped 44 percent.
Although HP has not announced anything yet, CEO Meg Whitman made it clear in the last earnings call that she believes the company needs to cut some expenses to offset its declining revenue.
The projected layoffs could be the largest in HP’s 73-year history, surpassing the 24,600 job cuts announced back in 2008.
HP has had trouble responding to the rising smartphone and tablet trend, as well as Apple’s growing personal computer market share.
ISI analyst Brian Marshall told MarketWatch that a reduction in HP’s workforce “will improve confidence” in the company’s guidance. He said the company’s target is for at least $4.00 earnings per share in the current fiscal year.
Sterne Agee analyst Shaw Wu said there are weaknesses in other segments in HP’s product line, including printers.
“What we are picking up are mixed trends where its PC business appears to be recovering but offset by sluggishness in services, printers, and servers,” he told MarketWatch. “The company appears to be making some progress in software, but it remains a relatively small contributor.”
HP’s printing business has slumped in the past few years, falling 10 percent in profits last year as sales remained flat.
Wall Street analysts surveyed by Thomson Reuters are predicting that HP’s sales fell 5 percent last quarter, and they expect its profit to be down 26 percent.
HP, the nation’s largest technology company by revenue, currently employs 349,600 people around the world, according to its regulatory filing.