HP to Expand Layoffs, Restructuring New Business Model?

Hewlett-Packard revealed in its annual report Monday it plans to cut an additional 5,000 workers as part of its restructuring plan – bringing the total carnage to 34,000 pink slips.

HP LogoThese cuts are part of its 2012 company-wide restructuring, which was initially expected to affect 27,000 workers and later revised to 29,000. The company cited “continued market and business pressures” as the reason for increasing the layoffs to 34,000.

The additional layoffs also follow a pledge in October by CEO Meg Whitman that the layoffs will be complete by October 2014 and that there will not be any more of this magnitude after that. However, don’t be so sure.

Slash, Burn and Trim

HP has initiated a workforce reduction virtually every year going back to 2008, according to the annual report filed with the Securities and Exchange Commission. If you add up its past three restructuring plans, excluding its 2012 biggie, the combined layoffs amount to approximately 39,000 jobs.

Here’s a recap of HP’s workforce restructuring over the years:

  • 2009: HP restructures its Imaging and Printing Group (IPG), Personal Systems Group (PSG) and Enterprise Storage and Servers (ESS) business. Job cuts – 5,000.
  • 2010: HP restructures its Enterprise Services business, which includes infrastructure technology and business process outsourcing, as well as application services. Job cuts – 9,000.
  • 2012: HP announces a multi-year restructuring plan to simplify business processes, accelerate innovation and deliver better results. Job cuts – 29,000
  • 2013: HP revises 2012 workforce reduction, citing continuing market and business pressures. Job cuts – 5,000 positions added to cuts.

Workforce Restructuring, a New Business Model?

Layoffs are part of corporate life to keep expenses in check with revenues. Just ask Cisco Systems, which is doing just that. Or they’re a means to chop off or pare down businesses that are no longer relevant, or eliminate redundancies in the name of efficiencies.

At HP, all three reasons have been used throughout the years of restructuring. And it’s instituted them with with such frequency that it appears to be a way for it to manage its business, rather than as means of last resort.

Some in the business world may say, “Any idiot can cut expenses, but it takes a genius to grow revenues.”

Additionally, management experts would tend to agree that repeated rounds of layoffs hurt employee morale and may lead to greater defection by those employees a company may wish to keep. As noted in a Wall Street Journal article on how to institute layoffs, leadership experts advise doing “piece-meal” layoffs “:

Lots of layoffs in quick succession can be a sign of bad planning. Better to cut deep and infrequently. A culture of near-constant sackings can create fear in the workplace – not good if you want productive workers.

As 2014 kicks off, it will be interesting to see if HP initiates another restructuring round in the new year or expands once again on its 2012 plan.

27 Responses to “HP to Expand Layoffs, Restructuring New Business Model?”

    • Redmiata35

      Hold on there Fred…sounds a bit like female-bashing to me! You are forgetting the biggest slash, burn and take the biggest bonuses HP CEO ever: Mark Hurd! In the wake of all of his tyrannical lay-offs, he was paid to finally go away under scandal-ridden secrecy. HP lost more market share, innovation and just plain money under his reign and he was sandwiched between these two aforementioned ladies.

      This was once a wonderful company who move technology forward, now it, like just about all other technology companies are “managing” the business at the expense of the business. Ms. Fiorina could not have pushed through a single idea without the consent of the Board of Directors approval. Why is it then, that each of their names are not attached to the results? While I am not supporting what happened while she was there as CEO, I am beyond fatigued with people blaming her for the whole mess. She was the figurehead and there is much blame that should be brought out (names included) that simply never gets reported.

      • Fred Bosick

        Turn about is fair play. Everything you said about Fiorina can be applied to Hurd. Fiorina was the beginning of incompetent HP CEOs. I don’t think Apotheker got enough time to demonstrate actual incompetence.

        Now there’s another lady at the helm. Allegedly qualified and definitely blowhard. Remember, she spent $9/voter in a failed bid for CA governor.

  1. Let’s see. If the CEO lost one second of sleep for each laid off employee that would be 483 minutes of sleep. On the other hand, the CEO is likely to gain at least $100 for each laid off employee. I am betting that she sleeps like a baby. Ah, American management. You gotta love ’em.

  2. Right after Christmas! Those poor people! I feel so bad for them. This is one of the reasons I’m not pro biznez. Businesses can hurt people and families. It’s just pitiful! What happens to the people dishing this out? Guess they’ll say, “well, nothing personal, it’s just bidnez!”

  3. Anamericancynic

    What I love about all these restructuring’s, which by the way is not new just a new name (see Book The Witch Doctors), is that for the people effected by them having to explain to potentially new employers: “why aren’t you loyal to your past employers.”

    These managers need to stop reading books from all these consultants on how to be better managers because they are all doing the same things and destroying the companies long term sustainability, but I guess that’s OK if the shareholders are getting rich. What are seeing is nothing more than the Walmart Effect permeating corporate America. Love those low prices!!!

  4. I was part of the HP cut back in 2009 as a result of the EDS purchase. While layoffs are not rare anymore, one has to think about working for a company that constantly slashes head count. They won’t be able to attract or keep good talent.

  5. Not clear how this works. If those thousands of workers were redundant, how did HP get into that featherbedded position in the first place? And if they weren’t redundant, what’s HP going to do without them? And what’s a person who spent a lifetime honing IT skills supposed to do? What kind of life is it, when you are more or less cannon fodder in the tech wars? It’s a little creepy when people who play by all the rules in terms of job skill development and education end up in the same unemployment line as the buggy whip manufacturers.

    I’ve worked in places where vital things that should have happened simply didn’t, because there was no one to do them. Over time, it’s a slow-motion collapse.

    • In my 10 year stint with EDS/HP, they kept on hiring – no matter what. Didn’t matter if there was a hiring freeze edict, the managers always ignored it, and found a way to continue building their empires. Massive layoffs occuring at HP ? No problem, we’re hiring ! Due to this uncontrolled, unsupervised workforce management, there are so many people at HP that just stand on the sidelines watching the small minority doing the actual work. You can almost compare it to a large stadium watching a football game: 80,000 managers, admins, bean counters, governance, etc – all trying to look busy watching 22 people doing the essential core work for the Company.

  6. Remember when HP used to be a good company? Developed code on the HP 3000 years ago and worked at their site(s). Miss the pastries & fruit. 🙂 They also killed off the HP Nonstop (Tandem) as well. Or almost.

    • Blacque Jacques Shellacque

      “Remember when HP used to be a good company?”

      It was when they made scientific instrumentation and test equipment, in addition to printers and other media devices.

      Those days are all ancient history now…

  7. You know what would be nice, if the stockholders came in, investigated what all of management is really doing, and cut all the management positions. HP is a micro version of the federal government. Most managers don’t do squat but sit around all day surfing the web and covering their asses.Shit starts at the top, rolls down through management and splatters all over the people who are really working. What a mess. Hurd came in and took over the waste of space Fiorina. All he did was cut the hell of the workers and he was the darling of Wall St till he got his dick caught in the cookie jar. What a piece of shit.Now they are so discombobulated, they don’t know what to do. They deserve everything that happens to them.No sympathy here.

  8. Rebecca

    Management trashes the business with bad decisions, throws employees under the bus, takes a bonus. No wonder the U.S. is in trouble… stock funds have removed management accountability to shareholders.

    • You’ve said it all in a nutshell, Rebecca. I’ve spent nearly 30 years in IT and digital communications; it used to be a great place to work — full of smart people eager to develop and implement groundbreaking strategies and products. Now it’s just a bunch of bean-counters trying to figure out where to cut to raise stock prices and ensure executive bonuses and options. HP is just one example of how the U.S.A. has lost its innovative edge. Look at IBM, which now has fewer employees in this country than in India.

      Charles Dickens never said that Scrooge was an innovative, successful businessman — just that he was greedy and contemptuous of working people. Perhaps it’s time for U.S. executives to find a better role model.

  9. Yes, “the economy is accelerating” all right.

    Just like human waste “accelerates” as it swishes faster and faster around the rim of a toilet bowl when it’s flushing down the drain after the handle is hit! I wonder how many of those tens and tens of thousands of laid off and “downsized” workers are among the 1.8 million who just lost their entire unemployment check on December 28th?
    Welcome to 2014, ladies and gentleman! You ain’t seen nothing yet!

  10. I have observed nonplussed while HP production planning depends on customers order and not order trend. The side effect are sinusodal wave of uneven production run and lack of efficient capacity utilization. Also had a virtual meeting where their meeting application does not have sound and you connect via the phone to hear the speaker while you watch the presentation on the HP conference room. This I call unbusiness arrogance that commits expense in developing parallel but useless conference application, when they could easily adopt gotomeeting or others.

    The underlying problem here is management. The top management needs a purge to make way for business savvy managers.

  11. HP probably won’t make it long term. In my last 20 years consulting/admin experience I’ve saw a shift away from HP products. Customers who always purchased HP Servers now have Dell. Customers who loved HP Printers now have Canon or another vendors MFP’s. Even at home I no longer have an HP printer and I loved HP printers at one time.
    All it takes is a couple of layoff stories like this one and people run away from your products and no one wants to work for you as there is no job security. And for the current employees the only ones who end up staying are the ones who can’t get a job anywhere else due to their lack of marketable skills.