found this out on truthout. I feel it is about to hit the fan once again. Sooooo hold onto your hat folks…Look at the first paragraph, please, if you will…
Story as follows:::::::::::::::::::::::::::::::::::::::
Hewlett-Packard to Slash 14,500 Jobs
By Jesus Sanchez
The Los Angeles Times
Tuesday 19 July 2005
Hewlett-Packard Co. today said it will slash 14,500 jobs, freeze retirement benefits and reorganize its major business units as one of Silicon Valley’s pioneering technology companies struggles to compete against low-cost rivals.
The deep job cuts – which amount to about 10% of HP’s worldwide workforce – and other measures are expected to eventually save the company $1.9 billion annually and make it more competitive, according to the Palo Alto, California-based high tech firm.
“After a thorough review of our business, we have formulated a plan that will enable HP to begin delivering its full potential,” said HP Chief Executive Officer Mark Hurd in a statement. “We can perform better – for our customers and partners, our employees and our shareholders – and we will.”
The layoffs and corporate reorganization will force HP to take a pre-tax charge of $1.1 billion over 18 months.
On Wall Street, HP shares were trading lower this morning on the New York Stock Exchange.
The sweeping measures and job cuts, which would apparently spare HP’s sales force and highly respected research and development operations, come only a few months after Hurd was brought in to head the company following the departure of Carly Fiorina. Hurd is known for cost cutting and for turning around NCR Corp., where he was CEO and which, like HP, has several technology divisions.
The company has gone through ups and downs since its $19-billion acquisition of Compaq Computer Corp. in 2002, surprising Wall Street by falling short of expectations in some fiscal quarters.
HP was overtaken as the world’s largest PC maker in 2003 by Dell, which along with other rivals has been chewing away at HP’s position in the market for server computers.
The dominance of the printer division – long HP’s golden egg, providing 80% of the firm’s profits – also has been eroded by Dell, which introduced printers in 2003.
Large-scale job cuts could be particularly painful for HP. Since its founding in 1939, the company has had a culture of job security, although the familial atmosphere was soured by thousands of layoffs during Fiorina’s tenure.
Hurd said most of the job cuts, some of which will take the form of early retirements, will target support positions in such departments as finance, human resources and information technology. The employment reduction will take place over the next 18 months and across HP’s worldwide operations.
In addition to reducing its payroll, HP said it will freeze future retirement and medical benefits for many of its current employees. Existing HP retirees or those employees near retirement age will not see a change in their benefits, the company said.
HP will also reduce the number of management layers and reorganize the company around fewer units focused on printers, personal computers and software and information storage systems.
Hurd said that half of the savings from today’s job cuts and reorganization will be reinvested in the company’s operations and the remainder will flow to the bottom line.
“Our objective is to implement these measures smoothly, with as little disruption to our business as possible,” Hurd said.
