Hewlett-Packard has announced that it will be laying off another 25,000 to 30,000 employees following the 55,000 job cuts earlier this year. The job cuts will help company achieve a cost saving of $2.7 billion annually. The job cuts comes after as HP readies for a future spin off company called Hewlett Packard Enterprise, which will cater to the computer infrastructure and services businesses and split the company in to two, quite literally.
The structural reorganization speaks volumes about how HP is shifting their focus on businesses and government agencies. The layoffs are major in nature, as they account for almost a third of 300,000 employees employed by the IT giant.
The fresh round of layoffs comes at a time when the employees were just recovering from the early 2015 layoffs and this has indeed made employees jittery as they feel the company is not yet finished with the layoffs. As of now, the company has not mentioned the locations in which the trimming down will take place.
On a not so brighter side, the proposition of workers from “low-cost locations” is expected to rise from the previously earmarked 42% to 60% by 2018, which seems more like a desperate measure to cut down on the operating costs and maintain the profit levels. HP has been largely hit by the fact that desktop and computer peripherals constituted a major part of their business and with the consumers moving away from desktop, the sales figures have taken a dip.
That being said, Hewlett-Packard still stands among the world’s largest technology companies and this year’s revenues are projected at $50-Bn. Most of the bigger companies are spinning off new companies in order to trim the workforce and refocus on their core businesses. Companies like Sony, HTC and Microsoft have been cutting down on their workforce and these measures can also be attributed to the fact that companies nowadays need high volume business to nullify the effect of lesser levels of profits.