WORLD> America
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WORLD> America
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HP surprises Wall Street with 24,600 job cuts
(Agencies)
Updated: 2008-09-16 15:04 At a conference with financial analysts Monday, HP Chief Financial Officer Cathie Lesjak said the EDS deal is expected to add to HP's net profit in the 2010 fiscal year. Until then, HP is planning for the acquisition to reduce net income by 17 cents to 19 cents a share in the current quarter, which ends October 31, and 6 cents to 11 cents per share in the 2009 fiscal year, Lesjak said at the conference in San Francisco. As huge as the reductions are, they are not the biggest in tech history. In the early 1990s, Armonk, New York-based IBM shed more than 150,000 workers over a five-year stretch as it racked up nearly $16 billion in losses and faced questions about its survival. Competition for services contracts is intensifying as businesses look for ways to offload some of their information-technology chores. Rising energy prices and demand for more computing power has made deploying new technology more costly and complicated, a combination that makes outsourcing those duties increasingly attractive for companies looking to cut costs.The turmoil on Wall Street has actually increased demand for those services in some sectors because it is often viewed as an investment that can help companies save money over the long term. One of the biggest challenges facing Hurd has been finding new ways to improve sales at a company that last year cracked $100 billion in revenue for the first time while keeping Wall Street happy with improving profit margins. Hurd has been aggressive about cutting costs since he was hired in 2005. His first big act was a major restructuring that eliminated nearly 15,000 jobs. Hurd's changes have helped HP wring more profits from its businesses even as the personal-computer industry as a whole grapples with shrinking profit margins, and HP's crown-jewel business,printer ink, aces intensifying competition from lower-cost competitors. |
