HP to decide on Irish jobs future

The decision on whether the planned 16,000 redundancies at Hewlett-Packard will affect its Irish operations in Leixlip will be made over the next few months, according to a company spokesperson.

The job cuts are part of a major ramp-up of CEO Meg Whitman’s years-long effort to turn around the personal computer maker and relieve pressure on its profit margins.

Whitman said the turnaround remained on track and her raised target reflected how HP continued to find areas to streamline across its broad portfolio, which encompasses computing, networking, storage and software.

The tech giant had previously announced it would let go 34,000 employees, but this has now been increased to 50,000 from its worldwide operations as part of a restructuring process.

It is expected that 41,000 will be made redundant by the end of this year, with the balance in 2015.

HP employs over 4,000 in its Leixlip plant and 250,000 globally.

The Silicon Valley company is trying to reduce its reliance on PCs and move towards computing equipment and networking gear for enterprises, part of Whitman’s effort to curtail revenue declines and return the world’s number one PC maker to growth.

But that goal remains elusive. The company posted a disappointing 1% drop in quarterly revenue as it struggled to maintain its grip on the shrinking personal computer market and weak corporate tech spending.

That marked its 11th consecutive quarterly sales decline.

Research jobs, which are vital for innovation and long -term growth, will continue to grow, Whitman stressed.

HP is looking to cut back more in “areas not central to customer-facing and innovation agendas” rather than areas such as research, she said in an interview.

“That’s not what we’re doing here. You need to look at the R&D spending, which is up,” she added.

HP recorded sales of $27.3 billion (€20bn) in its fiscal second quarter ended April 30, just shy of the $27.41 billion Wall Street had expected. On Thursday, HP forecast full-year earnings of $3.63 to $3.75 a share, compared with Wall Street’s estimate for $3.71. It reported non-GAAP diluted net earnings of 88 cents a share in the second quarter.

Additional reporting: Reuters