5 ms·

Hewlett-Packard to Cut About 30,000 Jobs (9% of workforce)

63 points by barredo 14y ago

apike 14y ago
This would be roughly 9% of HP's workforce. It's always much more interesting to see layoffs in terms of percentages rather than absolute numbers. "Walmart to cut 10,000 jobs" = 0.5% of their employees, probably nil effect. "Instagram to cut 10 jobs" = complete destruction of the company.
- barredo 14y ago
  Thanks. I edited the title.
hkmurakami 14y ago
Interesting, this morning it was quoted as 25,000 jobs. I'm actually quite surprised to hear that 10,000 of the cuts will come in the enterprise area, since I was under the impression that it was an area that HP was going to focus on, squaring off against IBM and Oracle.
- DeepDuh 14y ago
  My guess is it's the area they were going to focus on under apotheker until he lost all support.
kprobst 14y ago
That's a lot of jobs, even accounting for the fact that companies of that size often announce X number of positions eliminated to make investors happy but a lot of attrition ends up being "internal displacements" and accelerated retirements with chunky severance packages. Nearly 10% of a total workforce is nothing to sneeze at.
braisedbeef 14y ago
Why is there a CEO job if the only solution to problems is doing a layoff? Any fresher can do that for a small percentage of the CEO salary. Shouldn't an efficient company make layoffs part of their process if share price is the only goal and implement bonus reductions to CEO whenever that happens.
- yuhong 14y ago
  There are different kinds of layoffs, not all of which are bad.
deleted 14y ago
[deleted]
parasubvert 14y ago
Keep in mind that EDS, when HP acquired them, had 139,000 employees. The cloud has fangs. Just a matter of time for the big IT strategic outsourcers to feel the pinch (looking at you, IBM, CSC, Infosys, TCS, etc).
- jonursenbach 14y ago
  Is it a cloud issue, or is it just that HP has lost their "touch"?
  - gaius 14y ago
    HP's "touch" is now called Agilent.
adr_ 14y ago
They really are decimating their workforce. Ouch.
adventureful 14y ago
It's kind of mind boggling that HP has nearly 350,000 employees. Facebook is soon to be worth twice (maybe three times) what they are, with a mere 3,500 employees, despite HP earning seven times more profit. Something will have to adjust with that math.
- joshu 14y ago
  It's not current revenue that determines price. It's prediction of future value.
  - sliverstorm 14y ago
    It's PREDICTION of future value Which is where things get sticky.
  - adventureful 14y ago
    If we're going to be pedantic about it, it's not revenue that determines price, it's earnings, and specifically the expectations of future earnings. And it still makes absolutely no sense. HP has a great track record over the last decade of generating solid profits. I understand why they have a low PE ratio, the market is anticipating very slow growth. However, Facebook's growth meanwhile is slowing significantly, and they're IPO'ing at perhaps 120 times earnings (or more). That's a very large bet that Facebook will figure out how to accelerate their growth again. The market is wrong in its pricing of Facebook, and retail investors are going to suffer for it. Facebook is a compression trap. You slow their growth to 35%, peg their PE ratio to 35 times, and they need $3 billion in profit to justify their IPO price. Growing at 35% it would take Facebook about five years just to trade at a reasonable valuation. These things correct themselves one way or another; either FB accelerates, or the market will slice it in half in the next year to 18 months.
    - reitzensteinm 14y ago
      Future earnings isn't correct either (through pedantic glasses), because it doesn't handle cases where companies build value and then are acquired for a strategic reasons (think PA Semi). Expectation of future value and dividends is probably the truely pedantic thing to say, since (earnings - dividends) accrues to value. That way Walmart is covered.
alanh 14y ago
Good luck to any of you who work at HP.
mquander 14y ago
Why would a company ever cut 30,000 jobs at once, instead of smaller amounts of jobs incrementally? Presumably their desired number of employees did not actually change overnight by 30,000.
- adventureful 14y ago
  They're looking for a headline. 30k gets you headlines. The cut is for Wall Street.
  - johnthedebs 14y ago
    Also, morale. Remaining employees will have a hard time focusing if they're worried about losing their jobs.
- apike 14y ago
  Cutting all at once is better for morale than cutting over and over. If there are continuous layoffs, you're going to lose more of your key employees than if you can just cut deep and then build from there.
maximilianburke 14y ago
I've been through so many rounds of layoffs and it's always hard. I remember we lost about 15% of the workforce one year across the board which was tough. It was indiscriminate, friends you had know for years were gone all of a sudden. Then the next year we lost another 10%. That would've hurt too but by then I was just numb to it, and in some weird way I felt that those who were laid off were the lucky ones.
- mparlane 14y ago
  I feel for you, especially with the looming "when is the next lot going to be let go".
oconnore 14y ago
How does a 9% job cut actually work? How do you reliably pick 30,000 people who are less valuable than others? Is it just by department? Do middle managers make arbitrary lists? Dice?
- eitally 14y ago
  It depends on the situation, but it's usually a combination of a) entire organizations being gutted and b) specific individuals or small teams being let go. The former cuts broad swaths and the latter is to fine tune (a RIF is a great excuse for cutting unproductive employees that would otherwise be allowed to continue to be mediocre). Yes, I fully understand how ridiculous all of this sounds.
pinaceae 14y ago
For you guys wondering how it is even possible to fire 30k people at once: In every organization of that size there is cruft. Mind-bogglingly large cruft. Working with those behemots will teach you that you could fire entire departments and no one would notice. There is so many people simply tasked with completely non-customer relevant things like reviewing HR review forms, etc. - they get their pay, produce no tangible value. Now mind you, every company needs people to keep the whole structure going. HR, IT are never profitable, of course. But at some point during the growth phase of a company these start to metastasize - they are cancer, feeding themselves, leeching of the company that hosts them. And not just money, but also power. Suddenly managers of those areas have a say in company direction. Block innovation because of 'processes'. Have never seen a customer, never produced anything in their life, have no shred of idea of the core business of their company. And just like cancer treatment, past a certain stage you need to cut deep and wide. Prahalad and Hamel laid a bit of groundwork for more effective org-cancer treatment with their core competency definition. You know your cuts were deep enough when a few months in you notice pain. People not being able to service customers effectively. And you'd be surprised just when this really happens at places like HP. 9% is laughable. If you have lots of layers in an organization, every employee laid off has a ripple effect. Need less HR, accounting, IT, etc to service less employees. Even less layers of management as you can combine teams. Looking at certain country hubs of HP here in Europe I'd wager you could easily cut 50% of the current workforce without any negative impact on customer relations.
- hrktb 14y ago
  > You know your cuts were deep enough when a few months in you notice pain. There is always a layer or two of cruft in any large organisation, and I'd throw numbers like 10% out of thin air so 9% seems pretty reasonable. But cutting yourself until you bleed doesn't seem a healthy behavior. Added to that, in an organization where power games are all the rage and completely unneeded divisions have gained a say on important matters, the 9/10% you are cutting might not be the ones you really wanted to get rid of. P.S: At the exception of cutting an entire location or activity, It feels to me like you won't see much companies successfuly cut 10% of their workforce and turn the ship around. Not that it's a bad move, but it feels like you'll hit the bottom anyway when you come to this point (now once you touch the bottom you might actually be able to come up again, who knows).
msderosa 14y ago
HP has been cutting their workforce for a long time, at least since the Hurd days. Back then I suspect cuts were made based just on the numbers. Some people were expensive and I saw a lot of very capable people get let go. Eventually it became hard to find capable people and now, many years later, I suspect continued cuts wont matter. The good engineers that would have made their next generation of products were disposed of and wont go back. The good engineers of the future aren't being drawn to careers at HP. And the current management is getting theirs, while there is still momentum in the system. HP's time is past.
- shiftpgdn 14y ago
  I worked at HP briefly in 2007 and it was possibly one of the most poisonous work environments I've ever dealt with. Layoff rounds were a regular thing and you spent every day wondering if it was your last. Shortly after I left my entire department were told they could quit or be given a 50% paycut. I'm glad I got out when I did.

63 points by barredo 14y ago

apike 14y ago

This would be roughly 9% of HP's workforce. It's always much more interesting to see layoffs in terms of percentages rather than absolute numbers. "Walmart to cut 10,000 jobs" = 0.5% of their employees, probably nil effect. "Instagram to cut 10 jobs" = complete destruction of the company.

barredo 14y ago
Thanks. I edited the title.

hkmurakami 14y ago

Interesting, this morning it was quoted as 25,000 jobs. I'm actually quite surprised to hear that 10,000 of the cuts will come in the enterprise area, since I was under the impression that it was an area that HP was going to focus on, squaring off against IBM and Oracle.

DeepDuh 14y ago
My guess is it's the area they were going to focus on under apotheker until he lost all support.

kprobst 14y ago

That's a lot of jobs, even accounting for the fact that companies of that size often announce X number of positions eliminated to make investors happy but a lot of attrition ends up being "internal displacements" and accelerated retirements with chunky severance packages. Nearly 10% of a total workforce is nothing to sneeze at.

braisedbeef 14y ago

Why is there a CEO job if the only solution to problems is doing a layoff? Any fresher can do that for a small percentage of the CEO salary. Shouldn't an efficient company make layoffs part of their process if share price is the only goal and implement bonus reductions to CEO whenever that happens.

yuhong 14y ago
There are different kinds of layoffs, not all of which are bad.

deleted 14y ago

[deleted]

parasubvert 14y ago

Keep in mind that EDS, when HP acquired them, had 139,000 employees. The cloud has fangs. Just a matter of time for the big IT strategic outsourcers to feel the pinch (looking at you, IBM, CSC, Infosys, TCS, etc).

jonursenbach 14y ago
Is it a cloud issue, or is it just that HP has lost their "touch"?
- gaius 14y ago
  HP's "touch" is now called Agilent.

adr_ 14y ago

They really are decimating their workforce. Ouch.

adventureful 14y ago

It's kind of mind boggling that HP has nearly 350,000 employees. Facebook is soon to be worth twice (maybe three times) what they are, with a mere 3,500 employees, despite HP earning seven times more profit. Something will have to adjust with that math.

joshu 14y ago
It's not current revenue that determines price. It's prediction of future value.
- sliverstorm 14y ago
  It's PREDICTION of future value Which is where things get sticky.
- adventureful 14y ago
  If we're going to be pedantic about it, it's not revenue that determines price, it's earnings, and specifically the expectations of future earnings. And it still makes absolutely no sense. HP has a great track record over the last decade of generating solid profits. I understand why they have a low PE ratio, the market is anticipating very slow growth. However, Facebook's growth meanwhile is slowing significantly, and they're IPO'ing at perhaps 120 times earnings (or more). That's a very large bet that Facebook will figure out how to accelerate their growth again. The market is wrong in its pricing of Facebook, and retail investors are going to suffer for it. Facebook is a compression trap. You slow their growth to 35%, peg their PE ratio to 35 times, and they need $3 billion in profit to justify their IPO price. Growing at 35% it would take Facebook about five years just to trade at a reasonable valuation. These things correct themselves one way or another; either FB accelerates, or the market will slice it in half in the next year to 18 months.
  - reitzensteinm 14y ago
    Future earnings isn't correct either (through pedantic glasses), because it doesn't handle cases where companies build value and then are acquired for a strategic reasons (think PA Semi). Expectation of future value and dividends is probably the truely pedantic thing to say, since (earnings - dividends) accrues to value. That way Walmart is covered.

alanh 14y ago

Good luck to any of you who work at HP.

mquander 14y ago

Why would a company ever cut 30,000 jobs at once, instead of smaller amounts of jobs incrementally? Presumably their desired number of employees did not actually change overnight by 30,000.

adventureful 14y ago
They're looking for a headline. 30k gets you headlines. The cut is for Wall Street.
- johnthedebs 14y ago
  Also, morale. Remaining employees will have a hard time focusing if they're worried about losing their jobs.
apike 14y ago
Cutting all at once is better for morale than cutting over and over. If there are continuous layoffs, you're going to lose more of your key employees than if you can just cut deep and then build from there.

maximilianburke 14y ago

I've been through so many rounds of layoffs and it's always hard. I remember we lost about 15% of the workforce one year across the board which was tough. It was indiscriminate, friends you had know for years were gone all of a sudden. Then the next year we lost another 10%. That would've hurt too but by then I was just numb to it, and in some weird way I felt that those who were laid off were the lucky ones.

mparlane 14y ago
I feel for you, especially with the looming "when is the next lot going to be let go".

oconnore 14y ago

How does a 9% job cut actually work? How do you reliably pick 30,000 people who are less valuable than others? Is it just by department? Do middle managers make arbitrary lists? Dice?

eitally 14y ago
It depends on the situation, but it's usually a combination of a) entire organizations being gutted and b) specific individuals or small teams being let go. The former cuts broad swaths and the latter is to fine tune (a RIF is a great excuse for cutting unproductive employees that would otherwise be allowed to continue to be mediocre). Yes, I fully understand how ridiculous all of this sounds.

pinaceae 14y ago

For you guys wondering how it is even possible to fire 30k people at once: In every organization of that size there is cruft. Mind-bogglingly large cruft. Working with those behemots will teach you that you could fire entire departments and no one would notice. There is so many people simply tasked with completely non-customer relevant things like reviewing HR review forms, etc. - they get their pay, produce no tangible value. Now mind you, every company needs people to keep the whole structure going. HR, IT are never profitable, of course. But at some point during the growth phase of a company these start to metastasize - they are cancer, feeding themselves, leeching of the company that hosts them. And not just money, but also power. Suddenly managers of those areas have a say in company direction. Block innovation because of 'processes'. Have never seen a customer, never produced anything in their life, have no shred of idea of the core business of their company. And just like cancer treatment, past a certain stage you need to cut deep and wide. Prahalad and Hamel laid a bit of groundwork for more effective org-cancer treatment with their core competency definition. You know your cuts were deep enough when a few months in you notice pain. People not being able to service customers effectively. And you'd be surprised just when this really happens at places like HP. 9% is laughable. If you have lots of layers in an organization, every employee laid off has a ripple effect. Need less HR, accounting, IT, etc to service less employees. Even less layers of management as you can combine teams. Looking at certain country hubs of HP here in Europe I'd wager you could easily cut 50% of the current workforce without any negative impact on customer relations.

hrktb 14y ago
> You know your cuts were deep enough when a few months in you notice pain. There is always a layer or two of cruft in any large organisation, and I'd throw numbers like 10% out of thin air so 9% seems pretty reasonable. But cutting yourself until you bleed doesn't seem a healthy behavior. Added to that, in an organization where power games are all the rage and completely unneeded divisions have gained a say on important matters, the 9/10% you are cutting might not be the ones you really wanted to get rid of. P.S: At the exception of cutting an entire location or activity, It feels to me like you won't see much companies successfuly cut 10% of their workforce and turn the ship around. Not that it's a bad move, but it feels like you'll hit the bottom anyway when you come to this point (now once you touch the bottom you might actually be able to come up again, who knows).

msderosa 14y ago

HP has been cutting their workforce for a long time, at least since the Hurd days. Back then I suspect cuts were made based just on the numbers. Some people were expensive and I saw a lot of very capable people get let go. Eventually it became hard to find capable people and now, many years later, I suspect continued cuts wont matter. The good engineers that would have made their next generation of products were disposed of and wont go back. The good engineers of the future aren't being drawn to careers at HP. And the current management is getting theirs, while there is still momentum in the system. HP's time is past.

shiftpgdn 14y ago
I worked at HP briefly in 2007 and it was possibly one of the most poisonous work environments I've ever dealt with. Layoff rounds were a regular thing and you spent every day wondering if it was your last. Shortly after I left my entire department were told they could quit or be given a 50% paycut. I'm glad I got out when I did.