HP To Get Rid of 10% of Full-Time Staff
HP announced that it has designed a cost-saving program to simplify its structure, and focus more on its customers, which of course means getting rid of employees.
14,500 employees will lose their jobs over the next six quarters, the company said. That is about 10% of its regular full-time staff. HP also said that it will modify its U.S. retirement benefits programs.
“After a thorough review of our business, we have formulated a plan that will enable HP to begin delivering its full potential,” said HP CEO and President Mark Hurd. “We can perform better – for our customers and partners, our employees and our shareholders – and we will.”
HP expects its plan to save the company $1.9 billion a year, as well as drive growth and increase business performance. The plan will also simplify the company’s reporting structure with fewer steps in the management chain.
The projected yearly savings of $1.9 billion is made up of an estimated $1.6 billion in labor costs and $300 million in benefits savings. The company expects to save between $900 million and $1.05 billion next year. The company said in a press release:
HP will carefully target staff reductions. Reductions in sales positions will be minimal, so that HP can continue to provide world-class service and avoid impacting customers; and there will be little change to headcount in research and development, to ensure that the company remains a leader in technology innovation.
The majority of staff reductions will come in support functions, such as information technology, human resources and finance. The remainder will be made inside business units, in areas where work can be reduced by improving processes and re-prioritizing existing tasks. To facilitate these reductions, HP will offer a voluntary retirement program to longer-serving staff based in the United States.
“Our objective is to implement these measures smoothly, with as little disruption to our business as possible. Great companies grow and reduce costs. We will do both,” said Hurd.
HP has recently added three new executive vice presidents (Cathy Lyons, Todd Bradley, and Randy Mott) to its Executive Council, which is now made up of 10 people.