HP, Philips to cut 2,000 jobs both

HP, Philips to cut 2,000 jobs both

SAN FRANCISCO - Agence France-Presse
HP, Philips to cut 2,000 jobs both

A logo of HP is seen outside its Belgian headquarters in Diegem, near Brussels.

U.S. computer giant Hewlett-Packard said Monday its job cuts under a major restructuring program will total some 29,000, or 2,000 more than previously estimated.

In a regulatory filing, the world’s biggest maker of personal computers said the cuts will be made through its 2014 fiscal year, with “a portion of those employees exiting” accepting a buyout, or “enhanced early retirement.”

The cuts are part of an effort by chairman and chief executive Meg Whitman, who took the reins at HP a year ago, to turn around the giant hurt by a shift away from traditional PCs.

Whitman said in August said the workforce reduction was proceeding faster than expected, with 4,000 departures in the first three months and the number expected to hit 11,500 by the end of October.

HP said the move was part of “a multi-year productivity initiative designed to simplify business processes, advance innovation and deliver better results for customers, employees and shareholders.”

The restructuring is expected to generate annualized savings of $3.0-3.5 billion by the end of the 2014 fiscal year for HP, which is struggling amid a move to mobile devices and tablet computers.

Meanwhile, Philips said yesterday it would shed 2,200 jobs globally as part of its restructuring program in a move to save the Dutch electronics giant an additional 300 million euros ($384 million).

“The company has identified additional opportunities, among others in the healthcare and lighting sectors, to further decrease inefficiency and complexity,” Philips said in a statement. “These additional structural saving opportunities of 300 million euros will bring the overall savings program from 800 million euros to 1.1 billion euros, to be completed by 2014,” the company said.

Philips Chief Executive Officer Frans van Houten told a teleconference that the company was “facing increasing headwinds due to the economy.” “Basically across the world we see uncertainty, basically we see our business notably slow down in China and in Europe,” he added.

The company, which employs around 122,000 people globally, is known for its televisions, small appliances and light bulbs, but has begun to develop its activities in the medical equipment sector.

Philips in July posted higher than forecast second quarter net profits of 167 million euros, thanks to a 13 percent jump in sales.

The results were a huge improvement over the company’s dismal 1.35 billion euro net loss in the same period last year.