Language Selection

English French German Italian Portuguese Spanish

Analysts expect massive HP layoffs

Filed under
Misc

Hewlett-Packard is likely to lay off thousands more employees, financial analysts have projected after new chief executive Mark Hurd presented his inaugural assessment of quarterly earnings.

Hurd didn't reveal specific layoff plans after the earnings report, but he did make clear HP's intent to cut expenses and said his company has "a cost structure that is off benchmark in many areas." Now the analysts are weighing in with their assessments of the printer and computer maker's future.

"We expect that Hurd will likely articulate his detailed plan for improving HP sometime over the next two months, and we do expect material workforce reductions--likely numbering five percent to 10 percent of the workforce, or 7,500 to 15,000 people," Sanford C. Bernstein analyst Toni Sacconaghi said in a report. He estimated that doing so could increase annual earnings by US20 cents to US40 cents per share.

Merrill Lynch analyst Steve Milunovich predicted job cuts would be announced by August; he projected an earnings boost of 21 cents to 42 cents per share for a hypothetical reduction of five percent to 10 percent of employees.

HP declined to comment Friday on possible layoff plans.

Massive job cuts have been more the rule than the exception in recent years at the Palo Alto, California-based company. HP laid off thousands of employees under the plan by previous chief executive officer Carly Fiorina to merge with Compaq Computer in an attempt to compete better against top rivals IBM and Dell.

Competitors have taken a similar approach. IBM announced a cut of 10,000 to 13,000 employees in its services division, and Sun Microsystems has laid off thousands in recent years.

HP is in the middle of more job cuts in divisions for imaging and printing, servers and storage, and services. Not all cuts have been in the form of pink slips, though: 1,900 employees took advantage of a voluntary severance plan in the imaging and printing division.

In the last quarter, which ended April 30, HP took a charge of US$71 million for the imaging and printing cuts. It also took a US$74 million charge for cuts in services and US$24 million for cuts in the servers and storage group.

In the current quarter, HP is budgeting US$100 million for job cuts that already were planned.

Source.

More in Tux Machines

Red Hat's Survey in India

From Raspberry Pi to Supercomputers to the Cloud: The Linux Operating System

Linux is widely used in corporations now as the basis for everything from file servers to web servers to network security servers. The no-cost as well as commercial availability of distributions makes it an obvious choice in many scenarios. Distributions of Linux now power machines as small as the tiny Raspberry Pi to the largest supercomputers in the world. There is a wide variety of minimal and security hardened distributions, some of them designed for GPU workloads. Read more

IBM’s Systems With GNU/Linux

  • IBM Gives Power Systems Rebates For Linux Workloads
    Big Blue has made no secret whatsoever that it wants to ride the Linux wave up with the Power Systems platform, and its marketeers are doing what they can to sweeten the hardware deals as best they can without adversely affecting the top and bottom line at IBM in general and the Power Systems division in particular to help that Linux cause along.
  • Drilling Down Into IBM’s System Group
    The most obvious thing is that IBM’s revenues and profits continue to shrink, but the downside is getting smaller and smaller, and we think that IBM’s core systems business will start to level out this year and maybe even grow by the third or fourth quarter, depending on when Power9-based Power Systems and z14-based System z mainframes hit the market. In the final period of 2016, IBM’s overall revenues were $21.77 billion, down 1.1 percent from a year ago, and net income rose by nearly a point to $4.5 billion. This is sure a lot better than a year ago, when IBM’s revenues fell by 8.4 percent to $22 billion and its net income fell by 18.6 percent to $4.46 billion. For the full 2016 year, IBM’s revenues were off 2.1 percent to $79.85 billion, but its “real” systems business, which includes servers, storage, switching, systems software, databases, transaction monitors, and tech support and financing for its own iron, fell by 8.3 percent to $26.1 billion. (That’s our estimate; IBM does not break out sales this way, but we have some pretty good guesses on how it all breaks down.)

Security News

  • DB Ransom Attacks Spread to CouchDB and Hadoop [Ed: Get sysadmins who know what they are doing, as misconfigurations are expensive]
  • Security advisories for Monday
  • Return on Risk Investment
  • Widely used WebEx plugin for Chrome will execute attack code—patch now!
    The Chrome browser extension for Cisco Systems WebEx communications and collaboration service was just updated to fix a vulnerability that leaves all 20 million users susceptible to drive-by attacks that can be carried out by just about any website they visit.
  • DDoS attacks larger, more frequent and complex says Arbor
    Distributed denial-of-service (DDoS) attacks are becoming more frequent and complex, forcing businesses to deploy purpose-built DDoS protection solutions, according to a new infrastructure security report which warns that the threat landscape has been transformed by the emergence of Internet of Things (IoT) botnets. The annual worldwide infrastructure security report from Arbor Networks - the security division of NETSCOUT - reveals that the largest distributed denial-of-service (DDoS) attack reported in 2016 was 800 Gbps, a 60% increase over 2015’s largest attack of 500 Gbps.