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HP: We're axing 29,000 workers? Add another 5,000 to that

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HP will lay off 5,000 more workers than the 29,000 positions earmarked for redundancy in July.

The increase is mentioned in a Hewlett-Packard 10-K filing to US financial watchdog the SEC. The paperwork states on page 118:

As of July 31, 2013, HP estimated that it would eliminate approximately 29,000 positions in connection with the 2012 Plan through fiscal year 2014 ... Due to continued market and business pressures, as of October 31, 2013, HP expects to eliminate an additional 15 per cent of those 29,000 positions, or a total of approximately 34,000 positions, and to record an additional 15 per cent of that $3.6 billion in total costs, or approximately $4.1 billion in aggregate charges.

The "continued market and business pressures" refers to HP's inability to sell more of its products. Its latest quarterly financial results suggested the Meg-Whitman-led computer firm had turned the corner in its recovery efforts. But it has some way to go before it can grow revenues to bank profits greater than 4 per cent or so off sales.

The 10-K filing mentions that HP's net revenue declined 6.7 per cent (down 5.5 per cent on a constant currency basis) in fiscal 2013 compared to fiscal 2012 – and that's due to revenue declines of approximately 10 per cent, 8 per cent, 5 per cent and 3 per cent in its Personal Systems, Enterprise Services, Enterprise Group, and Printing segments, respectively.

The tech titan blamed these falling sales on:

  • A significant contraction in the overall PC market, which hit Personal Systems;
  • Weak public-sector spending and enterprise IT demand, particularly in Europe, which affected the enterprise arms of the biz;
  • Competitive pricing pressures in the enterprise and PC markets, which impacted the Enterprise Group and Personal Systems segments;
  • Unfavorable currency rates and volume declines in supplies, which affected the Printing segment.

HP's gross margin decreased by 0.1 percentage points in fiscal 2013 compared to the previous year due "primarily to competitive pricing environments in the markets for Enterprise Group and Personal Systems products and decreased revenue and contractual price declines for Enterprise Services."

It seems inevitable that some of the 5,000 positions to be eliminated will be in Europe. The company, which employs 330,000 worldwide, warned of possible redundancies in early 2014 in a pre-Christmas missive to staff. ®

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