HP to cut up to 30,000 more jobs in corporate split

HP has revealed plans to cut a further 25,000 to 30,000 jobs as part of its structural split into separate enterprise and consumer companies.

The creation of the standalone Hewlett Packard Enterprise will create a company with more than US$50 billion ($70 billion) in annual revenue and a large portfolio of enterprise products and services.

As part of an associated restructuring plan to deliver US$2.7 billion in annual cost savings, HP said it expects to eliminate around 25,000 to 30,000 positions.

HP will record a US$2.7 billion charge as part of the layoffs, beginning in the quarter ending in October. The company expects a cash impact of around US$2.6 billion over the next three years starting in the next financial year.

The layoffs are in addition to a previously announced reduction of 55,000 jobs associated with the separation.

“Hewlett Packard Enterprise will be smaller and more focused than HP is today, and we will have a broad and deep portfolio of businesses that will help enterprises transition to the new style of business,” HP CEO Meg Whitman said. Whitman is set to become CEO of the new business.

Post-separation, the company expects HP Enterprise to generate around US$5 billion to US$5.2 billion in cash flow from operations and US$2 billion to US$2.2 billion in free cash flow for fiscal 2016.

Image courtesy of Don DeBold under CC