HP's split will hopefully end the layoffs nightmare

Sep 16, 2015 09:59 GMT  ·  By

It seems that HP's CFO Tim Stonesifer has confirmed that 25,000 to 30,000 people will leave the company in the following days.

The reason behind these job cuts is that HP's Enterprise Services Division, the consulting arm of the company, is being reorganized. Unfortunately, HP ES appears to be the unit that will be the hardest hit by the latest job cuts during HP's multiyear layoffs.

Although it used to form a massive 349,000-person empire stretching across the globe, HP has been hit hard the last couple of years by plummeting PC sales and internal reconfigurations. So far, the company has let go 51,000 people since 2012, and according to Business Insider, last month CEO Meg Whitman and CFO Cathie Lesjak said that another 5% of the staff would join them.

HP now has to fight angry ex-employees

As it turns out, the restructuring will cost HP about $2.7 billion, and jobs will have to be trimmed following the split. Job layoff scandals seemed to rock HP for the last couple of months, as the company has also tried to force its employees to get lower paid jobs at some of its partners like Ciber and Adecco. Apparently, the new jobs meant lower pay, roughly $20,000 less than before, for employees who worked for ten years in the company. If they refused the offer, they would still be fired from HP but they would also lose severance pays and many other benefits.

The disgruntled employees made their case public, and after some media coverage, they were allowed to work at their new jobs with the same payroll they had at HP.

Currently, HP's situation isn't rosy, since it has a continuous 11 percent year-on-year decline in revenue for each quarter that puts the company in a bad light when it comes to its long-term sustainability. It's believed that the split that will occur in November 1 at HP will reduce the massive multiyear layoffs and will, hopefully, stabilize the company.