HP set to wield axe in the Middle East

HP staff across the Middle East are bracing for the worst after the computer giant announced it will cut 14,500 jobs, about 10% of its staff, as part of a restructuring plan designed to save US$1.9 billion annually and boost business performance.

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By  David Robinson Published  July 24, 2005

HP staff across the Middle East are bracing for the worst after the computer giant announced it will cut 14,500 jobs, about 10% of its staff, as part of a restructuring plan designed to save US$1.9 billion annually and boost business performance. The US-based firm employs 670 people across the region in offices in Dubai, Abu Dhabi, Cairo, Riyadh and Jeddah, and is in the process of opening operations in Oman and Lebanon. Most of the job cuts will come in support functions — such as information technology, human resources and finance — and the rest will be made inside business units. The company has said that job cuts in sales positions — where the majority of regional staff are employed — will be minimal. But regional spokesman Samer Karawi said it was still possible that numbers would be slashed. “All areas are under review,” he told Arabian Business. The job cuts will occur over the next six quarters, the company said. As part of the cuts, HP said it will offer a voluntary retirement programme to longer-serving employees. Technology analyst Todd McGregor said the company had a lot of reasons for keeping the actual number of job cuts in the Middle East under wraps at this stage. “They don’t want it to impact customers too significantly,” he said, before adding that the region should be relatively sheltered from the impact. “They run quite a lean and mean ship out here.” The restructuring, which has been anticipated since former NCR boss Mark Hurd was named chief executive four months ago, is within the range expected by most analysts. A few had suggested the number of redundancies could be as high as 25,000. “After a thorough review of our business, we have formulated a plan that will enable HP to begin delivering its full potential,” Hurd said in a statement last week. “We can perform better — for our customers and partners, our employees and our shareholders — and we will.” HP’s restructuring does not appear to be a major shift from the company’s strategy of competing in a broad area of the technology industry, from personal computers and printers to corporate servers and consulting. That is in line with statements made by HP’s board when it fired former chief executive Carly Fiorina in February and hired Hurd to replace her.

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