Foxrac

NEW YORK (CNNMoney) -- Hewlett-Packard announced Wednesday that it is slashing 27,000 jobs in a widely expected maneuver aimed at slimming down the struggling tech giant.

The company expects the layoffs, which amount to 8% of its worldwide workforce, to save $3 billion to $3.5 billion by the end of 2014. The majority of those savings will be reinvested in research and development, HP said.

Shares of HP (HPQ, Fortune 500) jumped by nearly 11% in after-hours trading as investors cheered the company's restructuring efforts and positive outlook.

The changes "will further streamline our operations, improve our processes, and remove complexity from our business," Meg Whitman, HP's CEO, said in a prepared statement. "While some of these actions are difficult because they involve the loss of jobs, they are necessary to improve execution and to fund the long term health of the company."

HP said it expects the job cuts to "yield significant improvements in efficiency and customer service" over the next several years. The company plans to revamp its slumping PC and printing businesses and to invest in building up its cloud-based services for corporate customers.

Meanwhile, Whitman said on a conference call with investors on Wednesday that she remains "cautiously optimistic" about the future of the company. HP is recovering from a tumultuous 2011, in which then-CEO Leo Apotheker sought to shed the company's PC business, continually reduced financial estimates and was subsequently fired.

Whitman said the company is seeing "early signs" of a turnaround.

"While I wouldn't say we're turning the corner, we are making real progress," she said. "We're streamlining and removing complexity at every turn."

For the past quarter, HP reported a better-than-expected quarterly profit and sales. Though it offered a downbeat business outlook for the near future, it raised its forecast for the full year.

The Palo Alto, Calif.-based company said its net income for the fiscal second quarter, ended April 30, fell 31% to $1.6 billion

The results included one-time charges of 18 cents per share. Without the charges, HP said it earned 98 cents per share. Analysts polled by Thomson Reuters, who typically exclude one-time items from their estimates, had forecast earnings of 91 cents per share.

PC sales were flat as unit sales fell another 1%.

HP said it is rethinking its branding strategy across all product lineups, but particularly PCs. It plans to take a $1.2 billion write-down on the Compaq brand -- further diminishing former CEO Carly Fiorina's costly legacy.

The company is also in the process of restructuring its printing business, sales of which declined by 10% over last year. The unit was folded into its PC division last month.

Services sales declined 1%, and servers fell by 6%. The company's software business grew by 22%, but it remains a proportionally tiny part of HP's business.

Overall, sales fell 3% to $30.7 billion, edging past the nearly $30 billion analysts expected.

The investment in research and development should help sales down the road, Whitman said.

"As a world-class innovator, we should have excellent quality products," she said. "I think we have very good products, but I also think they can be better."

The company said that it expects to earn between 94 cents and 97 cents per share this quarter, excluding one-time charges, coming in well below analysts' median estimate of $1.02 per share.

But HP said its cost-cutting will start to pay off soon: It now expects to earn between $4.05 and $4.10 per share for the full year, up from previous guidance and higher than analysts' forecasts.

HP to cut 27,000 jobs - May. 23, 2012

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Foxrac

HP sucks...

Apple is doing better job than HP.

Time for Meg Whitman to resign and look for CEO who ability to make big success.

I remember about Palm Pre, Web OS and HP TouchPad - all flopped.

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TXgolfer

I'm sorry, but do you understand what you just posted? HP was in the crapper. A lot of what they are doing is very positive right now.

These are good things. I don't know if she can save them be she is making all the moves you want to see as an investor.

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Foxrac

I take job losses so seriously and I don't want anybody to lose the jobs.

HP should fix itself in advance, probably few years earlier and they bought Palm, it is just huge mistake, just bad as Sprint bought Nextel that caused huge mess for years.

I'm not buy any products that are piece of shit, especially HP and I'm praising at Apple for huge success with iPhone, iPad, Mac, etc.

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Grummer

i wont be buying HP laptops again... not supporting wankers whose insist on bigger profits and laying off people they dont know or nor they care about...

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Grummer

next lappy will be an Alienware i know they big and heavy but its literally a desktop grade specs not overheating POS lappys we see all too often...

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TXgolfer

You realize Whitman wasn't there a few years ago, right?

Cutting jobs? That's business. It's better than folding and EVERYONE losing their jobs.

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Sometimes at night, I see their faces. I feel the traces they've left on my soul

Foxrac

Yup, I did realize and Whitman started as CEO last year.

Well, HP should be more smarter than cut the jobs, however I hope that job cut will affect China or oversea than just America only.

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TXgolfer

Smarter than cutting jobs??? They are cutting those jobs because those employees are holding them back in some way.....not just for the he k of it. They are trying to establish themselves as a strong player again. Strong businesses HIRE people. Hopefully this will save the jobs of the other 92% of their employees.

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Foxrac

You don't understand about my post and that's not what I was talking.

Now, I don't have better words to make clarify because you don't get it.

I just said about HP has more ways to turn into success than just cut the jobs to save money and they should do invention on new products that what customers are looking and willing to buy.

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TXgolfer

Umm....if you read the article that is exactly what HP plans to do. Takes money to do that....

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Do not be overcome by evil, but overcome evil with good. - Romans 12:21


Sometimes at night, I see their faces. I feel the traces they've left on my soul

Foxrac

Good luck to HP.

I don't know about how much job will losses from HP in America, however HP said it is worldwide.

HP isn't persuaded me to buy their crappy product, especially laptops.

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Foxrac

Same here, I fixed some of HP laptops.

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Foxrac

I think you should carefully to think about Alienware because their quality is getting worse now and I used to had Alienware in past but... it is huge disappointed.

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Grummer

..maybe a Sager?

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kokonut

Yeah...even Ben and Jerry's has to resort to such measures.

Poor Economy Kills 3rd Ave.'s 22 Year-Old Ben & Jerry's - The Shutter - Eater NY

Pink Slip: Layoffs have rippled through Ben and Jerry

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Foxrac

I heard about Sager has better quality than Alienware.

You could check notebook review forum and they got good information.

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Grummer

well do mate, cheers

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PowerON

Southwest Airline is one of smart business in Texas. They never cut jobs for a long time. They simple cut coffee to save cost. They're in profit for long time.

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PowerON

I'm disappointment, HP brought Palm and didn't do anything that much after tablet been launch for short time and end the support on WebOS. That wasn't smart.

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TXgolfer

Yeah the tablet craze caught them flat footed and broke. That is why I like their back to basics approach

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Do not be overcome by evil, but overcome evil with good. - Romans 12:21


Sometimes at night, I see their faces. I feel the traces they've left on my soul

TXgolfer

Southwest is a service oriented business. HP is a manufacturer. Big difference. But I agree Southwest is a very well run business. They have always stuck to basics and have never tried to grow too quickly.

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Do not be overcome by evil, but overcome evil with good. - Romans 12:21


Sometimes at night, I see their faces. I feel the traces they've left on my soul

Evo Dragon

I bought a HP Pavilion dm1z-3000 CTO netbook... What a joke about Winning Award netbook in the world.. I tested and not good for gaming as choppy, lagging as about less than 15 FPS gaming. I don't like AMD fusion on gaming lappy. I will give it away to ADer later. I stick with my high-end gaming PC.




HP Pavilion dm1z (with AMD Fusion) review -- Engadget

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Foxrac

Yup, all PC notebooks are no good and I had few PC notebooks but rest of them are wrecked in less than one year so I decided to buy MacBook Pro for portable.

I prefer PC desktop for gaming and Mac for portable.

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Foxrac

Based on my experience, HP is better than Toshiba.

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