Hewlett-Packard to Cut 9,000 Jobs

Updated at 2:05 p.m. EDT

Hewlett-Packard Co. said Tuesday it will lay off about 9,000 workers in the unit that provides technology services to other businesses as the company consolidates and automates its commercial data centers.

The cuts will be made over about three years and amount to some 3 percent of HP's global work force of 304,000 employees as of October 2009, the most recent figure available. The company said it plans to replace two-thirds of those jobs, hiring 6,000 people to boost its global sales and delivery staff.

HP said the job cuts will result from productivity gains and automation in the data centers, which are clusters of computers that HP's business customers tap into to store data, run software and perform other tasks. Like most companies that offer such services, HP has data centers around the world. HP did not specify the locations of its planned cuts.

Once it completes the restructuring, HP said it will see savings of about $500 million to $700 million a year.

HP, which is based in Palo Alto, Calif., said it will take $1 billion in charges, about half of it in the current quarter and the rest by October 2013, the end of its fiscal year. The charges, which are largely for severance expenses, will be excluded from the company's adjusted earnings results.

HP, the world's biggest maker of PCs and printers and the top technology company by revenue, has been working to expand its business in other areas as PC profit margins are usually thin. To boost its services business, the company bought Electronic Data Systems, a rival of IBM Corp., in 2008, cutting 24,600 jobs as part of that acquisition.

HP said the commercial data centers will help its corporate clients run their businesses faster and more efficiently. Ann Livermore, executive vice president for HP Enterprise Business, said the company is confident its actions will "provide a foundation for growth for the next 10 years."

"We believe that these sets of actions will enable HP to grow better than the market," she said in a conference call with analysts.

Standard & Poor's equity analyst Tom Smith applauded HP's latest actions, calling them the "next step toward efficiency gains" after the initial integration of EDS.

In addition to business services, HP is also pushing into the mobile market with its planned acquisition of struggling smart phone maker Palm Inc., announced in April.

HP's shares rose 47 cents, or 1 percent, to $46.48 in afternoon trading Tuesday.

[John_Rational]

The Dalai Lama recently stated that he was a Marxist because Marxism is based on moral ethical principles but capitalism was only about making money. Cultivative capitalism understands that ethical cultivation yields greater profits for all parties (including workers) in the long term. Value must be given for value received. There is no such thing as a good deal which isn't a good deal for every party involved. If a company wants loyalty from its workers it must give loyalty to its workers. Lay-offs are a last resort to save the company from failure and closure.

Imagine a company ad that said, "At US Solutions we don't lay people off, we don't send American jobs overseas, all of our offices are in the USA, and we only do business with other US companies!" Such a company would become very prosperous very fast. Let's build the best products right here and let Americans pay for the quality they want. You get what you pay for. If the 'one' from China costs half as much as the one from America, that does not mean it's a better deal. Especially if the one from America works better and lasts twice as long. We've been exploiting too long. Let's get back to cultivating.

[tsigili]

See.........the economy is getting soooooo much better.

[I_am_me1953]

That is goo because your comments are getting soooooo stale.

[missyfive]

When companies acquire other companies, they typically lay off people after the acquisition is complete. This is American capitalism at it's best. This is not an Obama issue; it's an issue of American greed. HP claims it will have support centers set up; expect to see these centers in India and China. The layoff queen Carly Fiorina set HP on this path years ago, along with other corporations hoping to save billions of dollars in cost. No one talks about the impact of the job layoffs on our communities and families. No politician wants to address this for fear of being seen as "un-American." Bush Jr.didn't want to address the issue of layoffs; too much money coming from lobbying groups to address this issue. Clinton and Bush Sr. applauded NAFTA and we all know how well that is working. For fear of being seen as a socialist, Obama won't touch this. Corporate American has made a mockery of the American worker.

[Mortar_29]

Really?

Here's the thing. With our current mentality, if we were all around when the light bulb was invented...here is what would happen...

Workers in candle factories would begin to be laid off as the demand for candles dropped...as people began using light bulbs. Now, instead of getting with the times and getting a new skill, the candle workers would demand government assistance...and demand that the candle factories keep paying the current workers the same amount or more.

And when, due to economic reasons, the candle making management decides they must cut production, shut down plants, move some operations overseas and RIF workers in order to keep from going under...the unions and libs will scream "American greed."

What a bunch of sissies!

[rickwar]

Typical response for Mortar_29, to be expected.

Your model is simplistic, we are not really talking here about demand, we are talking about American jobs lost. I'm willing to bet that within 6 months of the lay offs HP will have increased it's workforce eleswhere.

You've been drinking that Kool-Aid for far too long, you actually believe yourself and your supporters.

Sissies? How about we send your job overseas and tell you we don't need you anymore, then lets see what song you sing. Oh, you'll be ok, you just need to get a better education and that will fix it for you. Perhaps you'll just drift over to that lower paying service sector job, that then moves overseas. But you'll be fine.

[rickwar]

Inother words----------More offshore workers at slave labor prices. My mother in law used to work for HP, she started when it was still in the original garage, she worked there 35 years, it was a great company then, both in product and how it treated employees. Now? Just another POS American corporation.

[dragon8me]

This is what you get from republicans. The head of the company who is running for congress as a republican is cutting 9000 jobs. We lost millions of jobs under bush, only now regaing some. We can't afford conservitive ideology that supports corporations over people. To be fair many conservitive democrats are the same way. One problem is that corporations have legal person status. All corporations need to have heavy regulations.

[lileoj]

Thats just lame for a company to buy up Palm for a Billon dollars and then fire a bunch of workers soon after! LAME!

[bobby1799]

To bad they can't fire the idot who stop production on there black ink drums and fuser kits. This company has said by the end of September they should be caught up. Well that is all nice, but our systems have been down for over a month. Maybe the should invest in better quality and production.

[lilbear925]

Since Carly Fiorina ripped HP apart, they have laid off more people than they originally employed in 1983. HP is now being run by techs in India, Puerto Rico, and Costa Rica, as well as recent technical school grads here in the states. Another fine US company is slowly sinking into the mire of trying to get stockholders a return on their misguided investments.

[pragmatist1]

She's been long gone, so stop blaming her for their downfall. Blame the new board, the execs for any shortcomings, loss of demand, technology trumping the need for a human, the economic downturn, etc. Or perhps the HP situation is also the fault of Bush?