Hewlett-Packard reports $8.9bn loss amid ongoing restructuring

Posted on 23 Aug 2012 by Tim Brown

Hewlett-Packard have announced its largest ever quarterly loss of $8.9 billion as the U.S. computer giant was forced to write down the value of asset Electronic Data Systems, a technology consulting service it bought for $13 billion in 2008.

“HP is still in the early stages of a multiyear turnaround, and we’re making decent progress despite the headwinds,” said Meg Whitman, president and chief executive officer, in announcing results for the fiscal third quarter.

HP was forced to book a loss under accounting rules, to reflect the lower value of some assets.

The Silicon Valley pioneer and world’s biggest maker of personal computers and printers, is taking a charge to cover the costs of cutting some 27,000 jobs, or 8% of its global workforce, by 2014 in a major restructuring.

The cutbacks is expected to generate annualised savings of $3 billion to $3.5 billion for HP, which is struggling amid a move to mobile devices and tablet computers – devices that are reducing demand for HP’s personal computers.

Earlier this month, HP said more employees than anticipated were taking early retirement and that the cost of the reorganization would rise to between $1.5 billion and $1.7 billion.