HP to cut 6,000 jobs following poor Q2 results
HP to cut 6,000 jobs after posting earnings down 17% in second quarter
HP has announced that it will cut another 6,000 jobs, following poor second quarter results.
The cuts will be in addition to the 24,000 jobs that HP is already losing following the acquisition of EDS.
On Tuesday, HP posted quarterly results showing net earnings down 17% from the same quarter last year, to $1.7 billion.
Quarterly revenue was down 3% to $27.4 billion, although this was up 3% when adjusted for the effects of currency. EMEA region revenues were down 11%, although the company refused to comment on Middle East results.
Services was the only strong performing area for the company, with revenue up 99% to $8.5 billion, primarily off the back of the August 2008 acquisition of EDS.
Mark Hurd, HP chairman and CEO commented: “Disciplined focus on operational efficiencies and execution drove record cash flow. Our services business continued to deliver strong profitability with an increased deal pipeline and the EDS integration tracking ahead of schedule.”
Hurd remained cautious about the ongoing situation, telling analysts: “You can view this as sort of ‘steady as she goes’. The quarter behaved generally as we expected.”
HP is predicting revenues in the third quarter to be either flat or to decline 2% sequentially.
John Madden, principal analyst at Ovum commented: “We think it’s a smart move for Hurd to provide this kind of tempered guidance to HP’s customers, partners and shareholders – and resist the urge to view some small signs of recovery as proof of a larger, imminent turnaround.
“We continue to be impressed with HP’s ability to cut and control costs. But until the global financial picture stabilizes, and we’re able to gauge how HP’s service delivery capabilities are ultimately affected by the ongoing headcount reductions, it will take some time to determine just how good HP’s chances really are,” he added.