HP revenues down 3pc to US$30.7bn – 27,000 workers to exit company

24 May 2012

HP CEO Meg Whitman

HP reported second-quarter revenues of US$30.7bn, down 3pc year on year but an improvement on the first quarter when revenues dropped 38pc. Net profits were down 31pc to US$1.6bn.

HP confirmed that as part of a multi-year restructuring drive some 27,000 workers – 8pc of its workforce – will exit the company by the end of 2014. The restructuring is projected to generate annualised savings in the range of US$3bn to US$3.5bn.

It said workforce reductions will vary country by country and it hopes the majority of those who exit will take up the offer of an early retirement programme.

“These initiatives build upon our recent organisational realignment, and will further streamline our operations, improve our processes, and remove complexity from our business,” said Meg Whitman, HP president and chief executive officer.

“While some of these actions are difficult because they involve the loss of jobs, they are necessary to improve execution and to fund the long-term health of the company. We are setting HP on a path to extend our global leadership and deliver the greatest value to customers and shareholders.”

HP’s Q2 performance

Revenues in the crucial Personal Systems Group (PSG) were flat – desktop units were up 5pc, notebooks were down 1pc.

Service revenues declined 1pc while the key Imaging and Printing Group saw its revenues decline 10pc during the year.

Enterprise Servers, Storage and Networking saw a 6pc year on year decline.

Software revenues, possibly boosted by the acquisition of Irishman Dr Mike Lynch’s Autonomy, which HP bought last year for stg£7.8bn, were up 22pc.

HP says Lynch will, however, be stepping down and will be replaced by Bill Veghte, HP’s chief strategy officer, to boost Autonomy’s performance.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years