by bloomberg.com
Hewlett-Packard Co. (HPQ) is considering cutting as many as 25,000 jobs, or 8 percent of its workforce, to reduce costs and help the company contend with ebbing demand for computers and services, people briefed on the plans said.
The number to be cut includes 10,000 to 15,000 from Hewlett-Packard’s enterprise services group, which sells a range of information-technology services and has been beset by declining profitability, said these people, who asked not to be identified because the plans aren’t final and may change.
Meg Whitman, chief executive officer since September, is seeking to reverse the growth slump that led to the ouster of her predecessor, Leo Apotheker. The company’s PC sales are dropping as consumers favor tablets, such as Apple Inc.’s iPad, and it has been slow to adapt to the shift toward cloud computing, away from the IT services Hewlett-Packard provides.
“Hewlett-Packard could make the difficult decision of announcing” a workforce reduction, Brian Marshall, an analyst at ISI Group, wrote in a research note earlier this month. This “would enable investments in strategic, higher growth areas.”
Eliminating 18,000 jobs could result in savings of about $1.2 billion and add 50 cents to annual per-share earnings, he estimated.
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