They have been fined millions in Australia for misleading consumers, their directors have been labelled “dishonest” and their Australian operation is haemorrhaging millions, so it is not surprising that Hewlett Packard is set to cut up to 16,000 additional jobs say analysts.
Overnight the Company who is struggling to grow their PC business in Australia has said that they will slash between 11,000 to 16,000 jobs, above a target of 34,000 the company outlined in a multi-year restructuring plan in May 2012.
The US Company said that the increased cuts come “as HP continues to re-engineer the workforce to be more competitive and meet its objectives.”
HP’s CEO, Meg Whitman, said in a statement that the company’s turnaround “remains on track.”
“We’re gradually shaping HP into a more nimble, lower-cost, more customer- and partner-centric company that can successfully compete,” she said.
Whitman has been working to restore growth since September 2011, when she took over the 75-year-old company. Hewlett-Packard is headed for a third straight annual sales decline amid lacklustre demand for its PCs, printers and servers. Sales of corporate computer systems are suffering as companies use software tools via the Internet, while providers of such cloud services are building their own equipment.
“The workforce reduction suggests the demand environment continues to be challenging,” said Bill Kreher, an analyst at Edward Jones & Co. who has a hold rating on the stock. “The company is still in some very challenging businesses. The company needs to right-size the business.”
The company also reported that net income in the three-month period ending April 30 rose 18 per cent to $1.27 billion, or 66 cents per share.
Excluding special items, adjusted earnings were 88 cents per share, meeting the expectation of analysts polled by FactSet.
Revenue fell 1 per cent to $27.31 billion, below the $27.43 billion analysts expected.
The company said it expects adjusted earnings of 86 cents to 90 cents per share in the current quarter, with the midpoint a penny below the 89 cents analysts are looking for. HP said full-year adjusted earnings will be between $3.63 and $3.75 per share. The midpoint is two cents below analysts’ expectations of $3.71 per share.
The quarterly results were unexpectedly released early before markets closed. HP’s stock dropped 74 cents, or 2.3 per cent, to close at $31.78 and fell 1.8 per cent to $31.20 in after-hours trading.