By Matt Burns
HP is reportedly going to be announcing massive layoffs next Wednesday. Conflicting reports state somewhere between 25K and 30K jobs, between 7% and 8% of HP’s global workforce, could be eliminated in an effort to absorb losses from decreasing demand for the company’s products and services. The cuts could happen over the next year, rather than a mass layoff, according to AllThingsD who also state that the total number is still undecided.
Wall Street is reacting positively to the news. HP’s (NYSE:HPQ) stock price dropped shortly after the news but quickly recovered and started climbing with word of the restructuring. During the writing of this post, the stock price dropped slightly but is still up for the day.
If true, this is the latest of new CEO Meg Whitman’s drastic changes within HP. When she took over for Leo Apotheker, she nearly immediately announced that HP would not spin-off its PC division, the Personal Systems Group, as Apotheker once considered. Instead, Whitman’s team combined the PSG with the profitable Imaging and Printing Group.
The layoffs will reportedly be announced alongside HP’s quarterly earnings. Whitman will, at least per AllThingsD, deem the layoffs as necessary to make much-needed investments. Rather than just cutting people, the company will cut its workforce and then reinvest across the company.
This comes as HP is struggling to regain its dominant position in the PC and services world. While still on top per the numbers, competitors, including Apple (NASDAQ:AAPL), are racing forward with hot products. This is something that Whitman previously acknowledged to the company, predicting that Apple might surpass HP this year, but 2013 will be the year HP employees can once again celebrate — except for the 30K about to get pink-slipped.