HP To Give The Axe To 27,000 Employees

Earlier today, HP announced its latest quarterly earnings and the results were not good — like “We are going to have to lay off 27,000 employees” not good.

The Wall Street Journal reports that this number represents about 8% of the electronics company’s workforce. The layoffs are expected to be completed by the end of HPs 2014 fiscal year. The company plans to reinvest the expected $3-3.5 billion savings back into the business, with a focus on cloud computing and security.

HP reported a 31% drop in earnings during this past quarter, mostly attributed to lackluster sales in its PC and printer divisions. These two groups were recently combined, as people are switching their computing to wireless devices and printing an awful lot fewer documents.

“These initiatives build upon our recent organizational realignment, and will further streamline our operations, improve our processes, and remove complexity from our business,” said CEO (and former eBay chief, and former California gubernatorial candidate) Meg Whitman. “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.”

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  1. deejmer says:

    Oh you crazy ‘job creators’!

    • BorkBorkBork says:

      Maybe they should consider creating better products?

    • hmburgers says:

      This is how you do it…

      In one year you axe 27,000 people, you look really bad, but you spin it as best you can and blame the current president, global economy, whatever…

      Then over the next 5 years you hire 5,000 people per year, in year 2 after hiring 10,000 you ask for tax breaks promising another 15,000 jobs over 3 years…

      As CEO, you now look like a business master for saving the company money on taxes, and “creating” 25,000 jobs.

      Somewhere in the middle there thousands of people literally get screwed, and millions of tax payers are shafted.

  2. FatLynn says:

    The accompanying picture is pretty horrible.

    • Costner says:

      I agree… if by “horrible” you mean “incredibly awesome”.

    • Naked-Gord-Program says:

      Please take your puritan beliefs back to the church where they belong.

      Normal people who aren’t afraid of their genitals like hot ladies and dudes (dependent on sex and/or orientation).

      • Stickdude says:

        Please take your puritan beliefs back to the church where they belong.

        I’ll have to remember that line the next time the HR rep mentions something about “hostile work environments”. I’ll be sure you get the credit.

    • raydee wandered off on a tangent and got lost says:

      The “H” in “HP” stands for Hooters?

    • hmburgers says:

      I think the horrible-ness relates to the fact that HP feels the need to axe 27,000 employees to cut costs while at the same time is hiring “models” to promote their products at extravagant trade shows….. because I always need to see a pair of tits before I decide to buy an enterprise grade switch or whatever the fuck it is that HP makes these days.

    • quail says:

      Looks cold in that room.

    • Starrion says:

      It reminds me of the Dilbert on trade shows:

      For a booth to be successful, you either need an illusionist, or a raffle, or booth babes.

      If you want a really successful booth, create an illusion that you are raffling off the booth babes.

    • mehitabel says:

      yeah, not happy to see the sexism on Consumerist

    • NumberSix says:

      I for one, enjoy an eye full of booth professionals.

  3. Jawaka says:

    I’m glad that the economy is getting better otherwise I’d think that this was bad news.

    I’m sure that all 27000 of these people will find new jobs in no time at all.

    /s

    • Stickdude says:

      I have no doubt that Obama will be quick to blame Bush – or Bain Capital – or both.

      • FatLynn says:

        We should all be blaming the do-nothing Congress that won’t get serious about spending our way out of this. That’s the only way our country has ever gotten out of a recession.

        • IR1 says:

          So maybe HP should spend its way out of its trouble?

          Obama has already spent trillions and we already owe the Chinese almost our entire country. Sure lets just borrow more and blast the debt ceiling into space. Maybe we could try something that won’t send us along the same path as Greece and Europe in general.

          • Costner says:

            we already owe the Chinese almost our entire country”

            Source please? I know this talking point is tossed around a lot – by people from both sides of the aisle, but it isn’t exactly true. The amount is far less than what most people think, and it is nowhere near “almost our entire country”. In fact most of the debt our government is under is actually owed right back to the American people via bonds and IOUs taken from various areas such as Social Security.

            Besides, China still owes the US anywhere from $800B to $1T depending upon who you ask, so the debt they do hold of ours is really on par with what they old us. If it came to it, we could just perform a debt swap whether they liked it or not.

            http://americanbondholdersfoundation.com/
            http://www.foxnews.com/opinion/2011/08/26/its-time-for-china-to-pay-its-debts-to-united-states/

    • FatLynn says:

      FTR, Meg Whitman will get a $2.4M bonus if HP hits its targets this year, and up to $6M if they do really well.

      • TheMansfieldMauler says:

        …which is a miniscule amount compared to the “$3-3.5 billion savings” that will be realized from her doing her job.

        • hmburgers says:

          It’s true… as long as this decision is made with the best interest of the company over the long term, and it not being made simply because hey, now Meg hits her targets and the company looks like it’s “doing really well” for the next year or two.

          I will certainly admit that at an older company like HP, “pruning” the older branches can certainly inspire growth, but it needs to be done in a rational and well thought out manner.

          A cut flower will look and smell beautiful for a few days, but it comes compost after that. Let’s hope this is a skilled and strategic pruning, and not harvesting the flowers.

  4. MrMagoo is usually sarcastic says:

    I used only HP printers for years until a couple of years ago, when I got sick of paying their ridiculous prices for toner and ink; I was also sick of HP’s refusal to allow retailers to discount their products.

    I bought a Brother – it’s done great, and the toner’s about half the price per sheet. I don’t think I’ll ever consider HP printers again.

    Sorry, 27000 employees.

    • patrick bateman says:

      Whoever told you retailers can’t discount HP printers was wrong. Plenty of huge resellers do on a daily basis.

      • MrMagoo is usually sarcastic says:

        Not the printers – the ink and toner prices are fixed.

        • profchaos79 says:

          I sell HP ink and toner for a living (as well as other brands). It’s not even close to true that the prices are fixed.

    • MeowMaximus says:

      I too switched to Brother recently, and have been very happy. HP is circling the drain, and well be dead or bought out soon.

      • Saltpork says:

        HP is in no way circling the drain. Their ink printing for home maybe, but not the company itself.
        Their IT equipment is still a strong contender and their laser printers are still the standard for monochrome office printing.

        When your Brother printer breaks you throw it out and buy another. When your HP breaks you get it fixed.

        I worked the last decade in IT. HP has produced some of the best b&w office printers in the last 20 years and continue to do so without the Lexmark prices due to remanufactured toner.
        Don’t by HP toner unless you have very specific printing needs. Normally remans will do you just fine, providing you find a decent refurbishing company.

        We also used their servers fairly extensively at the places I’ve worked, although that’s more a statement about the places and their choices for hardware than the quality. Dell servers do a good job too.

    • alexwade says:

      HP and Epson and Lexmark are part of the “ink cartel”. Gillette gives away the razor knowing you have to buy replacements. The ink cartel sells the printers cheap knowing people have to buy the ink.

    • majortom1981 says:

      Their ink printers suck but their laser printers are good. Yes there toner is more then other brands BUT it equals out because their printers last longer.

      ALSO on HP printers the drums are included in a lot of their toner cartridges. Some companies seprate the two and charge more for them .

      PS this is from experience as I am an IT admin . We have tried all the major laser printer manufactures and just bought hp color and b&w printers because they last longer.

    • HogwartsProfessor says:

      I have two HP printers, one being a large used 4050N laser printer (for manuscripts) and you can buy reman cartridges for it. I got it from a local company that sells and services printers and sells also the remans. They work well and if they don’t, all I have to do is call and they will swap it out.

      I know them because they were a vendor at my exjob. Good people. The laser printer is a real workhorse and if it needs fixing, my tech said it is not difficult.

  5. yellowdog says:

    “…printing an awful lot fewer documents.”

    Uh…

  6. Dragon Tiger says:

    Wait…. HP has cloud computing and security?

    • aja175 says:

      Believe it or not, they do. We looked at their network gear to replace our aging cisco infrastructure but decided to stay with cisco.

    • amuro98 says:

      Yeah, HP bought a bunch of network security companies a few years back and is busily smushing them, Voltron-style, into its new software business unit.

    • bwcbwc says:

      Yeah, they bought EDS a few years back, so there’s probably a lot of pre-existing services that can be revamped. “Secure enterprise level cloud computing” is really just outsourcing over the internet to someone who has experience managing application services and data centers.

  7. galm666 says:

    So the same people who probably decided to gimp a lot of the designs and specs for much of the PC hardware HP made are more than likely *not* the ones getting the axe.

    Awesome.

    • AdviceDog says:

      Reminds me of a comment on Top Gear.

      “… this Aston Martin was clearly designed during the Ford era by Ford’s crack-team of accountants…”

  8. saffronbandit says:

    Why did you have to use that picture? I was trying to show off the capabilities of RSS to my co-worker, but this picture was all we could talk about. I don’t think he’s an RSS believer yet.

  9. RvLeshrac says:

    $3 billion in savings? I find it hard to believe that the employees to be laid off are making an average of $110k/year in salary and benefits. They’re more than likely support-centre and warehouse staff.

    • Velvet Jones says:

      That is corporate accounting. I work for Fortune 500 company and I get involved in budgeting from time to time. During project planning and budgeting, US employees are always counted at $150k a head per year. That factors in not only the employee pay, but the costs associated with them(health care, payroll taxes, cube space, hardware/software, etc).

      • TheMansfieldMauler says:

        What? You mean desks, cubicles, chairs, phones, computers, electricity, water, etc. are not free?

    • RandomHookup says:

      There’s a tendency in these layoffs to target higher paid people … Director of Partner Programs, for example, or combine sales exec roles. It’s faster to get to the savings when you get rid of folks who cost a lot and add something, but not massive dollars, to the bottom line.

      I guarantee I will interview a number of these folks over the next few months.

    • TheSpatulaOfLove says:

      As someone potentially one of the 27k in the mix, I’ll point out that it’s not the lowest level that will be targeted. With the merger of printing and PC divisions, there will be ‘staff’ people that are most exposed. These are the marketing, mid management, supply chain, and other higher paid employees that are likely to lose their jobs. In addition, the field isn’t feeling too comfortable, as we have watched a lot of folks get laid off every quarter for the past 7 years – many without really any rhyme or reason and were top performers.

      To help enlighten those who are not in the know, Meg did mention this in corporate-speak months ago. While we didn’t know who, what, where, when, why and how, (and for the most parts still don’t know), we at least knew to begin brushing up resumes and firing up LinkedIn profiles. That’s a lot more than the previous ‘leadership’ gave in the past.

      I do believe Meg is trying to do the right thing, and will feel that way even if I am tapped on the shoulder. She has already made some moves that has gained trust in the rank and file, but the major messes left behind by the previous 2 CEOs are not going to be fixed at Wall-Street-Speed. It should also be noted that changes from the top take awhile to shake down to the feet on the street, and will take a very long time to convince those burnt in the past to try again.

      • framitz says:

        I hope you don’t have to learn the lesson that loyalty has no reward, you may be loyal to the company, but they certainly are not loyal to you in any way.

        I learned the hard way a few years ago.

        But sometimes you have to move on to move up.

        Good Luck.

    • hmburgers says:

      You’re thinking in the box… 27,000 employees represent salaries, benefits, and infrastructure costs.

      My company maintains a brilliant facility here for about 50 employees. I’m sure they’re paying ten thousand plus per month, just for the office space and utilities, now add up all the equipment we use, the costs for provide phone and internet services, etc… now multiple that by probably tens or maybe even hundreds of locations.

      These probably are a mix of manufacturing, engineering, management, etc… the fact that they mention early retirement indicates these people are probably pensioned, domestic skilled workers… these aren’t minimum wage call center jobs.

    • amuro98 says:

      You forget about medical benefits, administrative costs for all the paperwork generated by each employee, etc. etc.

  10. dougp26364 says:

    Upper management makes stratigic market mistakes and the lower paid employee’s pay with their jobs. Brilliant!

  11. clydesplace says:

    Coming soon to a Chinese factory and India call service near you! 27,000 new jobs!

    • gman863 says:

      HP’s consumer products (including PCs and printers) have been made in China for at least the past ten years. The only thing they still (possibly) assemble in the US are higher-end custom servers.

      • coffee100 says:

        They also manufacture layoffs. Considering the consistent complaints in this thread about quality, I guess we see what ten years of Chinese manufacturing has achieved for HP.

  12. keepher says:

    In no way am I surprised by this news. HP has been run in to the ground for years. At one time I would own nothing but HP products but now I have zero. Their customer service is non existent, their products have no longevity.

    If they really want to bring this back to a company worth doing business with they need to return to their old model and trash the one that paid executives millions to destroy it.

  13. Loias supports harsher punishments against corporations says:

    Whuya….abba….owa…..HP….boobies….nom nom

  14. Costner says:

    Meg Whitman has zero experience turning a company around and there were a lot of analysts that predicted bad things for HP when they brought her in. Based upon what I’ve seen thus far from her, it appears to be nothing more than the traditional approach taken by so many CEOs for various companies. Falling back upon massive layoffs is hardly innovative.

    I’m not saying they don’t need to cut some of their workforce, but if a company is so bloated that they admit they have 27,000 people too many, then they are simply poorly managed and have been for far too long. Companies don’t grow that fast overnight, and they don’t shrink that fast overnight. Growth and job eliminations should be done on an ongoing basis so that they don’t send ripples throughout the company.

    The only reason I suspect they are announcing what they plan to do over the next couple of years is to hopefully appeal to some shareholders which might help the stock price (or at the very least prevent it from falling even further) – because this type of statement does not have any bearing on whether people buy their products. Customers don’t care how many employees a company has… they just want a good product. Build good products and offer good services at a fair price, and the customers will be there.

    I predict Whitman won’t last more than four or five years. The company will continue to exist, but I dare say they will never become innovative under her reign.

    • PhilipCohen says:

      Meg Whitman is on record as saying that “a monkey could have driven that [eBay] train”. The shame is that she could not find another monkey; she gave us instead the headless turkey, John Edward Donahoe … Sheesh

    • AdviceDog says:

      I don’t Whitman wanted to last more than 4 or 5 years.

      And she’s cutting jobs so that the share price goes up and increases her earnings when she leaves on amicable terms (with a very generous severance package) after driving that company straight into the ground.

  15. Pete the Geek says:

    I still have the HP 48G that got me through undergraduate engineering.

  16. jp7570-1 says:

    I can only speak to my personal experience with HP products, but the two HP laptops my company assigned to me were/are crap (the first one failed, and its replacement is slow and buggy). Based on the design and reliability of these two HP products, I can’t say it is a surprise that the company has to downsize.

    A few years ago, HP printers seemed to be the standard for both office and small business/home use. But when I purchased an HP printer for home use, the first one out of the box failed to initialize. I returned it and its replacement would not power up. That went back as well. The third one failed to recognize its own USB port and could not connect to my computer. After 3 failures, I returned the final replacement and got my money back. Again, a really bad experience.

    Of course there are critics for every computer company – Dell, HP, even vaunted Apple. No one is 100% perfect. But if my prior experience with HP products was any indication, HP is in serious need of better design and quality control.

    • majortom1981 says:

      HP’s laser printers are still great. I had to buy 2 new hp laser printers because all the other brands we got broke. We tried all the major brands with no luck. Ended up going back to HP

  17. SoCalGNX says:

    Good ole Meg didn’t suffer any so why would she care.

  18. Mark702 says:

    Email, PDFs and the like are the biggest printing killer. And I’m glad, less paper used and it’s faster.

  19. Morgan Le @ EasyFinance.com says:

    Another round of layoffs for HP! Word out is hinting that the whisper number is $0.90, 1 cent behind analysts’ estimate. Analysts are predicting that HP could tumble 15% by 2013… Let’s hope cloud computing and security pays off from their reinvested $3-3.5 billion savings from these layoffs.

  20. Press1forDialTone says:

    Meg Whitman is a RepubliThug without any qualifications whatsoever to be running
    a cornerstone company like HP. Its completely outrageous. She and her lover Carly
    Fiorini have nearly bankrupted every company they have been associated with and
    with Meg that started with Ebay.

    Digusting. Maybe she should call in Bain Capital to finish the job.

  21. Froggmann says:

    “HP reported a 31% drop in earnings during this past quarter, mostly attributed to lackluster sales in its PC and printer divisions.”

    Ummm yea that’s what happens when you piss off IT staff with junky printers that become obsolete in a year, release nothing but a “Universal Print Driver” that crashes print spoolers faster than a drunk celebrity for all models of printers and sell servers that don’t charge their on-board accelerator card batteries so they go dead in 9 months and forever spam you about their status.

    These are the types of things that get us to stop buying your products.

    Can I have the old HP back? You know the one that built printers that lasted an easy 20 years, always had print drivers that worked and built servers that were robust and simple to maintain.

    • hmburgers says:

      That’s also what happens when ~4 years ago you announce you’re exiting the PC business ala IBM, then screw it up and say “Mulligan!” … yeah there are a lot of corporate spenders who were not happy with idea of buying from HP today only to see the brand be sold off in a year or three, they went elsewhere.

      Not to mention the number of consumers with a bad taste for HP after the nVidia debackle from 2006-2008. Those people were all start buying new machines, you think they’re buying another HP so it can die in a year or two and have you tell them to shit in hat?

  22. coffee100 says:

    Nobody would have guessed it would only take putting 1000 people in the right corporate offices to utterly destroy the United States in less than a generation.

  23. Extended-Warranty says:

    As much as I don’t want to sound like a misogynist, I just don’t see women running big companies successfully unless the company directly targets women.

  24. xanadustc says:

    If these 27000 people are the stupid international call centers, I might actually start to do business with HP again….bbbuuuuuttttt….looking at the cost earned to the number laid off….I would say they will probably hire more people at $0.01/hr to make up for the lost American jobs….

    This, HP, is why I have not done business with you since I swore never to again several years ago….

  25. incident_man says:

    How about the execs at HP bear the burden of their mismanagement, rather than taking it out on the workers?

    Naaaaah…..that’d never happen, they might have to erase some of the zeroes off the end of their paychecks. Heaven forbid that unpleasant thought!

  26. oldthor says:

    I just hope bonuses for the top executives are extremely large this year after they found the prime reason why their profits are down. It wasn’t designs no one wanted or even bad business decisions, it was those pesky 27,000 workers causing the loss of profit!. Thank god we have these great executives at the top who have no problem having any employee but themselves fall on the sword. Now if we can just get Obama out and get back to the old profit ways of the Bush administration with Romney help we’ll be able to fleece our way back to big bucks again, Sigh I can hardly wait!

  27. bben says:

    When a company decides to lay off that many employees, they should start with the people actually responsible for the loss. First, the CEO, followed by a few more of the upper management who participated in the decisions that resulted in the losses.

    The top people are the ones who caused this mess, not the rank and file who were just doing what they were told.

  28. Christine says:

    Yeah… maybe because the second last computer (HP) that I purchased for $2,000 PLUS $350 extended warranty spent more time in the shop than out. A week after my extended warranty expired my screen completely fell off….
    Now.. my Toshiba, I spent $450 on, is now in way into our second year without incident. I begggggged HP to help me… They blamed Best Buy and Best Buy blamed them… sooooo… my last printer was a Lexmark, where I spend a ton of money on replacement cartridges – but I don’t care – it’s not an HP!!!!!!

  29. Rick Sphinx says:

    First company mistake, hired an executive from eBay. Need I say more. eBay has been ruined from what it was, and what it could be.

  30. Scooby111 says:

    If you need to lay off people, you inform all of your employees of the issues and the reasons, you give them the criteria that will be used to lay people off, you stick to those criteria during the layoffs, you do them in a transparent manner, you provide as much severance as you can reasonably manage, and you attempt to minimize the layoffs by offering early retirement or additional severance to people who volunteer to leave.

  31. Willy_HSV says:

    “HP reported a 31% drop in earnings during this past quarter, mostly attributed to lackluster sales in its PC and printer divisions.”

    Maybe if they didnt charge so damn much for ink, people would still buy their printers. I use to stick with the HP printers cause they did a wonderful job, but the ink got to expensive to keep buying, so I switched to a Kodak printer that prints just as well, is not as finicky, and the ink costs a portion of the price of HP ink.

  32. SPOON - now with Forkin attitude says:

    are the girls in the picture being laid off?

  33. SPOON - now with Forkin attitude says:

    Note to apple, dont buy these guys with your petty cash.

  34. quail says:

    Read an article 6 years ago about HP’s woes. When they dominated the printer market they designed those products. When issues began to creep in was about the time that production went fully overseas and they ‘kinda’ designed those products. Reading the comment about using one driver for all of the printers makes sense. They outsourced that and are too cheap to revisit the driver to make sure it’s the best it could be.

    I stopped using HP 10 years ago for printers. After a run in with a Compaq laptop 6 years ago I’ve totally sworn off of anything HP touches. Their goal is to maximize profit (which all companies want to do) but they want to do it without giving any form of value. Most customers aren’t lazy enough to stick with a company like that.

  35. sj_user1 says:

    There is only one employee HP needs to axe. Everything she touches turns to crap.