(By Balaseshan) Hewlett-Packard Co. (NYSE:HPQ) is planning to cut 29,000 jobs, raising the total number of layoffs by 2,000 over the next two years, to focus on attractive growth potential segments.
In a regulatory filing, HP said it plans to cut 29,000 positions in connection with the 2012 restructuring plan through fiscal 2014, compared to earlier estimate of 27,000. The company said its third fiscal quarter is its weakest and its fourth fiscal quarter is its strongest.
On May 23, HP adopted a multi-year restructuring plan designed to simplify business processes, accelerate innovation and deliver better results for customers, employees and stockholders. The company-wide restructuring is expected to be implemented through the end of fiscal 2014.
In connection with the plan, HP expects to record aggregate charges of about $3.7 billion through the end of HP's fiscal 2014 as accounting recognition criteria are met. Of that amount, HP expects about $3.3 billion to relate to the workforce reductions and about $0.4 billion to relate to other items, including data center and real estate consolidation.
HP recorded an initial charge of about $1.7 billion in the third fiscal quarter of 2012 relating to the restructuring plan. As of July 31, 2012, HP had eliminated about 3,800 positions as part of the restructuring plan. The cash payments associated with the plan are expected to be paid out through the first half of fiscal 2015.
For the latest third quarter, adjusted earnings per share (EPS) fell 9 percent to $1.00 from $1.10 in the same period of last year. The company posted a GAAP loss of $8.9 billion due to restructuring and goodwill impairment charges of $10.8 billion.
Revenue declined 5 percent to $29.7 billion. For the past three quarters, HP's revenue has been falling as dwindling sales of PCs coupled with a shortage of hard disk drives (HDD) taking a toll on its results.
During its fourth quarter of fiscal 2012, HP will perform its annual goodwill impairment review for all of its reporting units as of August 1, 2012. If there are changes in HP's stock price, or significant changes in the business climate or operating results of its reporting units, HP may incur additional goodwill impairment charges.
HPQ is trading up 1.28% at $17.51 on Monday. The stock has been trading between $16.77 and $30 for the past 52 weeks.