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HP sets in motion largest payroll purge in 73 yearsBy Ryan Noik 24 May 2012 | Categories: news
Sweeping changes are afoot at Hewlett Packard (HP), as its chief executive officer, Meg Whitman, announced 28 000 job cuts over the next eighteen months.
However, some of these layoffs will apparently consist of early retirement packages, and the job cuts will apparently vary from one region to the next.
The move is a bid by Whitman to streamline the company, as she has taken on the daunting task of turning the company’s fortunes around after poor choices made by her predecessor, Leo Apotheker, left HP floundering last year.
The restructuring measures are expected to save the company in the region of $3 billion to $3.5 billion. According to Mashable, the bulk of this will be reinvested back into the company, with research and development claiming the lion’s share, alongside cloud, security and information services.
Streamlining for success
During a conference call with analysts, Whitman explained that the company had to streamline its operating model. Apparently, each business unit was examined, with a view of what HP wanted to focus on, while the question was posed as to how many individuals it needed to deliver that service.
Whitman also told analysts during the call that "While I wouldn't say we have turned the corner, we are making real progress.” She added that "turning HP around is going to be a lot of hard work. It's going to take time. But we know what needs to be done.”
Apparently, the austerity measures were encouraging to investors, as the company’s shares rose more than 9% following the news, to $23.05.
Root of the problem
According to the Daily Democrat, HP’s predicament was sourced in poor decisions made by its former leaders, Mark Hurd and Leo Apotheker. While the former slashed investments into research and development (which has long been considered the keystone in the company’s ability to innovate), the latter ignored a changing PC landscape, which had turned its attentions to smartphones and tablets.
Apotheker was replaced by Whitman after announcing plans to abandon HP’s personal systems group (PSG) division amid the unfortunate demise of the company’s TouchPad tablet. One of Whitman’s first acts was to reverse this decision, as she pledged to retain the PSG division.
To the point
Of late though, it has become abundantly clear that HP is not resting on its laurels. It recently announced a number of ultrabooks and sleekbooks to follow up its solid Folio 13 offering, showing that PC development remains close to its heart.
Additionally, the company is expected to jump back into the tablet waters with devices running on the Windows 8 operating system when it is launched later this year. Perhaps these measures, along with the austerity changes Whitman has announced, will help HP regain its former glory.
It appears as though, the number one PC manufacturer is taking its “invent” logo to heart; however it’s greatest invention - or rather reinvention - to date may just end up being itself.
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