Hewlett-Packard (HPQ:NYSE - commentary - research) detailed a broad restructuring Tuesday that will result in the elimination of 14,500 jobs over the next six quarters.

The company, struggling to rein in costs under new CEO Mark Hurd, hopes to save $1.9 billion annually from the actions, which also include aligning sales and marketing operations with their respective manufacturing units. Shares slipped 0.9% to $24.71 on the widely expected announcement.

The layoffs amount to 10% of H-P's workforce and will result in pretax restructuring charges of about $1.1 billion through 2006. Most of the charges will appear in the company's fiscal fourth-quarter financial report and executives declined to comment about business demand during the third quarter, which ends this month. The company expects annual savings of $1.9 billion starting in 2007, including $1.6 billion in reduced labor costs and $300 million in benefit savings.
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After buying Compaq, of course they are cutting more people. This is one bloated company.

Yep, I second that. Too many HP employees are currently getting highly paid
for waiving a badge at the security in the morning, checking email,
then having a good meal in the cafeteria at lunch,
having a useless meeting with coffee and donuts in the afternoon
and then beating the 101 and 280 traffic at 4pm.

William Hewlett and David Packard must be spinning in their graves.

Cheers,

And in fact my former employer.

I designed the web integration part of the merger/acquisition.

Tdrive,

Weren't you on that movie "office space." Yeah, now I remember, you were the guy hired to "downsize" the company. I thought that was a comedy, not a documentary.

In their quest to cut out the bloat, the fat, I'm sure they cut the CEO's pay in at least half, probably he could survive well with a 75% reduction. Viva la pack.

Another HP alumnus here.

It was a great place to work, a collegial supportive atmosphere. You were treated as an adult. I worked hard and so did most of the other people I knew.

It would make a fascinating story -- the rise and fall of HP. Part of the reason for the decline can be found in Tainter's theory, of how complex societies by their very nature become less efficient.

Were you Compaq, Aaron?

I'm not in the computer industry but I follow financial news regularly so my 2 cents is based on that. Oh, and I live in Houston where Compaq was located before the buyout.

This company is flat out insane in many ways. First of all they paid former CEO Carly Fiorina some 36 million dollars as a part of her getting fired package earlier this year. I wish I could get that kind of deal adjusted for my income level. I mean...pay me between $250K and $500K and you can fire me on the spot and I'll be thrilled.

That aside, HP has no direction these days and opperates their business like it is still 1993ish and only the well educated or techy people know computer technology. They still market most of their consumer product with that "simple and cute with simple words someone as stupid as you can understand". Gone are the days when only a segment of the population knew what RAM, a hard drive, processor speed, etc...are.

They just don't seem to get that point.

This is not only costing them the sales with the home buyer that spends around a grand or two but commerical customers who spend much more are hesitant to spend with them because they have this kiddy 13-22 yr old target consumer appearance.

HP also makes way too many products. They need to scrap some things and focus in on one area. If I were running it that thing would be digital images and photography. If they can do something like make a digital camera that retails for under $250 and rivals the Nikon D70 in photo quality and speed they would have a hit.

That's just one example. The bottom line is that they are NOT going to be able to be leaders in printing, image technology, photography, PCs, servers, peripherals of all sorts, etc....

They need to scrap poorly functioning segments of focus on what they do best.

I used to WORSHIP HP. I dreamed of working for them, and may well have, if I'd been born earlier - before affirmative action, no college for whites unless they're rich, racial quotas in hiring, and the self-destruction of HP.

First they got rid of the REAL HP, the test equipment devision, and that's called Agilent now. Then they hire some chick who apparently knows nothing to run the carcass of the once-great company. They eat Compaq, known to insiders as comGACK, and so on and on and on.

Their printers are decent, if they were smart they'd just make printers and become a printer/graphics company or something.

Yes, the original H and P are no doubt spinning in their graves at a high RPM.

Looks like cuting jobs it becoming very fashionable.



Missed earning = lost jobs.

When peak oil hits earnings will really decline. The job losses this will incur will put us into the next Great Depression in no time flat.

Yeah I was in the global ecom group. When the merger went forward, I was among the first 100 astronauts to kick off the process.

It's funny, I have a big framed poster in my bedroom from this time titled:

"Why it will work"

lol

The regular peeps I worked with were all great. But as I climbed the management ranks, it's the same old BS as any other big company... pretty much like your Junior year in high school.

Lots of friends still there anxiously awaiting the other shoe dropping.

I managed the global content management group

A recent Economist article claimed that the stock market valuation of the company... was about the same as the value of the printer division only. .i.e HP was a printer company with a whole bunch of useless crap attached to it.

I do not think this is yet another sign of the end of the world. A badly managed company is returning to reality.

I worked at HP Boise (LaserJet lab) during part of 2003. They were working to outsource alot of development and testing jobs to India back then. While I was there my opinion was that HP was a formerly great company with many future problems looming. Heavy reliance on contractors, outsourced technology, "partnering", etc. Instead of creating their own technology, the focus seemed to be on purchasing someone else's. And this was in the flagship division!

A funny thing was that when Carly F. gave her "state of HP" speeches, it was piped through the intercom system to every corner of the building. Like the "voice of God" talking to you from the ceiling. It was even piped into the bathrooms!

No offense, but thats why you dont run a company. No way you could make a D70 equivelent and sell it for $250.
If HP wanted to focus on a core sector honestly it should be printers. There corporate level printers are bar none the best on the market IMO. Simply frickin tanks that will print and print and print, and when you've printed the entirety of the Intarweb you can change out ink cartridges and print the whole damned thing again.
But, I cant there being a large market for just printers.

If components for a ditigal SLR were manufactured by contractors in China and the whole thing was engineered by Koreans or Indians overseas I'm sure they could make a camera that rivals the D70 for under $250.

Rivals does not mean is 100% equal to or better than. It means HP's product basically takes very high resolution snapshots and can shoot fast frames. A vast majority of D70 buyers do not utilize all it can do. It's mostly a tech toy buy that comes with bragging rights.

HP would not need to have all D70 features at all; only the ones that most people use in snapshots.


Their printer business probably suffers becasue of the cost of the ink. These days you can get laser jet refills for just a few bucks more than an inkjet refill. For B&W printing the laserjet is a better choice anyway. They also probably suffered from that needle thing you inject into the ink jet well to refill. Anyone ever try that? Does it work?

HP's printer division is just getting what it did to Espon's old style dot matrix printers in the early 90s.

On a side note Fiorina was completely unqualified to be the leader of a computer company. Her undergrad was in philosophy/medieval history.
She then went to UCLA's law school and quit after 3-4 months. Then after a while she went back to school for the MBA in 1980 from the University of Maryland.

The fact that she has served in exeutive positions for AT&T & Merck is very surprising.

Well, given the fall of AT&T's business and the potential outcome of the Vioxx case in Texas combined with the problems at HP I think this woman is hexed. Everything she is involved with goes to hell later down the line.

Fiorina was probably good at playing the affirmative action game.

I have an HP laser printer right here next to me. Once in a while I even use it lol. Great printers, and I still worship HP even if it's the HP past..... I'm down to 5 pieces of HP test equipment since I've been cutting way down. .....