Hewlett-Packard Co. is thinking about cutting up to 25,000 jobs, or 8% of its employees, to lower costs and assist them with contending with the receding demand for services and desk top computers, according to people who said they were briefed on the companies’ plans.
The job cuts include 10,000 – 15,000 in the service department, which sells services related to different information-technology, according to the sources, who say they don’t want to be named because these plans are not finalized, and are subject to change.
Chief executive officer since September, Meg Whitman, is trying to counter the slump in growth, which led to the demise of Leo Apotheker, her predecessor. The firm’s PC sales are down because people prefer tablets, like Apple Inc.’s iPad, and it has been lethargic in moving towards cloud computing move away from its IT services.
Brian Marshall, an analyst at ISI Group, said in a research comment at the beginning of May that Hewlett-Packard Co. could make the challenging decision and announce a reduction in its workforce, and authorize investments in higher growth areas.
He estimated that by cutting 18,000 jobs it could save around $1.2 billion and make 50 cents on its annual per-share earnings.
The companies’ spokesman, Michael Thacker in Palo Alto, California, refused to make a comment, on the job eliminations.
Hewlett-Packard shares increased to $22.47 after the changes were reported in Bloomberg, and increased to $22.06 at the close of the New York Stock Exchange. Company stock has dropped 14% in 2012.