14 DAY TRIAL // HP continues to be the prime supplier of PCs (though some think Lenovo has it beat there), and deals in a host of other products as well, but that doesn't mean it's a profitable corporation. In fact, it has been posting losses for quite a few quarters now.
Most recently, it posted a 1% loss compared to the same period of the previous year (second quarter of 2014 vs. 2Q13).
This happened despite the revenue increase of 12% for the Commercial sector and 3.5% improvement on the Personal Systems segment. The Enterprise Group fell 14.4% in revenue, while Enterprise Services slipped 7% year over year.
The bottom line is that HP has been losing more money than it's been making for a fair while, which means that it has to cut its losses.
And unfortunately for the common man, “cutting losses” usually means firing people. Selling off certain assets can only do so much, and even that usually brings about layoffs.
Anyway, HP is preparing to fire 16,000 people. Well, optimists hope that it will be closer to 11,000 than 16,000, but 16,000 is pegged as the upper limit.
Currently, the corporation has 317,500 employees worldwide, so 16,000 will bring it close to a nice and round 300,000.
According to Hewlett-Packard, this is all part of a grander, far-reaching plan to turn the company around.
The current CEO Meg Whitman has a lot of problems she still needs to sort through after what happened back in 2011.
For one thing, the former CEO sais that HP was existing the PC market, prompting a huge backlash that cost the corporation a lot of consumer favor and share value.
Then there's the Acquisition of security tech provider Autonomy, which is still under investigation of accounting fraud.
Mag Whitman, former leader of eBay, took the reins a few months after her predecessor Leo Apotheker was let go, and she is still sorting out the company.
There seems to be a lot of that going on really. Acer is reorganizing itself in a similar manner, Kodak went bankrupt and it's trying to be “reborn” despite having lost all its assets (photo/video R&D, the Oscar nominations building, etc.), a whole bunch of memory makers went out of business over the past few years, etc.
HP definitely won't go bankrupt any time soon, but until it stabilizes and starts to grow again, there won't be any love lost between it and its employees (soon to be former workers).