HP to cut 2pc of global workforce

20 May 2009

Hewlett-Packard (HP) is to cut 2pc of its global workforce, or 6,400 workers, as it battles the tough economic climate. Revenues for the second quarter were down 3pc to US$27.4bn, with operating profits down 12pc to US$2.3bn.

However, the company said it achieved record cash flow from operations of US$5bn, while its services division more than doubled operating profits to US$1.2bn.

“Disciplined focus on operational efficiencies and execution drove record cash flow,” said Mark Hurd, HP chairman and chief executive officer.

“Our services business continued to deliver strong profitability, with an increased deal pipeline and the Electronic Data Systems (EDS) integration tracking ahead of schedule.”

Revenue grew 9pc in the Americas to US$12.1bn. Revenue declined 11pc in Europe, the Middle East and Africa (EMEA) and 10pc in Asia Pacific to US$10.6bn and US$4.7bn, respectively.

When adjusted for the effects of currency, revenue grew 12pc in the Americas, while declining 2pc in EMEA and 5pc in Asia Pacific.

Revenue from outside of the US in the second quarter accounted for 64pc of total revenue, with revenue in the BRIC countries (Brazil, Russia, India and China) declining 12pc over the prior-year period, while accounting for 9pc of total HP revenue.

By John Kennedy