posted at 16:50
Author Name: Julie Bort
HP Executives Hint More Layoffs Coming As It Splits
HP has laid off 41,000 people under its current downsizing plan for 2014. On Tuesday, the company hinted that more layoffs could be coming with its plans to separate itself into two huge companies. During its quarterly conference call, Wall Street analysts asked for details about HP's plans to divide itself into two companies: HP Inc., which will be the PC and printer unit, and HP Enterprise, which will be all the other businesses like servers, networking gear, software, outsourcing, cloud computing and so on. Maynard Um of Wells Fargo delicately asked CEO Meg Whitman if these plans will involve any "Incremental synergies" which is code for more layoffs, though it also implies getting rid of other things like equipment, real estate. "This separation was totally the right thing to do for this company," she said. "It gives us a chance to clean-sheet two, new Fortune 50 companies. It's remarkable how it focuses the mind around overhead. Do we need exactly what we have today? What we are not doing is separating the company into two pieces exactly as we have today. Knowing what we know now, if you have a chance to restart this Fortune 50 companies, how would you organize? That has been a really interesting and I think, going to be really good, for both of these companies." "This is an opportunity to do zero-based budgeting, as close as you can get to zero-based budgeting for two Fortune 50 companies. Because every line item needs to be reviewed. Every balance sheet item needs to be reviewed, in order to do this split. So its a huge opportunity for us to really take a different perspective with our cost structure." The layoff cost HP $1.6 billion in its fiscal 2014, and it expects to save $3.5 billion dollars when the layoffs are complete, applying some of that savings to R&D and product development hoping to get HP to grow revenues again.

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