Hewlett-Packard to cut 14,500 jobs

Manufacturing News, Source : TheManufacturer.com
Published : 19 Jul 2005 19:25

Computer manufacturer Hewlett-Packard announced that it plans to cut 14,500 workers over the next year and a half, and expects these actions to save the company $1.9 billion annually.

To improve costs, the company plans to reduce its workforce over the next six quarters by 14,500 employees, or about 10 percent of its regular full-time staff, and modify its U.S. retirement benefits programs. Beginning in fiscal 2007, HP expects approximate ongoing annual savings of $1.9 billion, composed of $1.6 billion in labor costs and $300 million in benefits savings. In fiscal 2006, HP expects savings of between $900 million and $1.05 billion.

"After a thorough review of our business, we have formulated a plan that will enable HP to begin delivering its full potential," said Mark Hurd, HP’s chief executive officer and president. "We can perform better—for our customers and partners, our employees and our shareholders—and we will."

HP expects to record pretax restructuring charges of approximately $1.1 billion over the next six quarters, beginning in the fourth quarter of fiscal 2005. This excludes a previously announced $100 million restructuring charge to be taken in the third quarter.

"Our objective is to implement these measures smoothly, with as little disruption to our business as possible,” Hurd said. “Great companies grow and reduce costs. We will do both."

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