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Media reports, led by the Financial Times, are suggesting that the computer and printer-making company will release the details of as many as 10,000 already promised job cuts throughout its operations worldwide. These cuts are designed to reduce duplication of tasks following the completion of HP's acquisition of Compaq earlier this year.
HP has already said that as part of the merger it will shed 15,000 jobs, although some analysts expect more, and the first 10,000 losses are set to be completed by the end of its fiscal year in October. The next 5,000 are due to be cut the following year. More significantly however, HP is due to release its first post-merger results on Tuesday, and it will be important for the company to show investors it is making progress in its cost-cutting programme and the integration of Compaq.
Some details about HP's job-cutting plans are already known. Over 4,000 US workers at the company have volunteered to take up an early retirement package. In Europe 5,900 jobs will lost; the company had to reveal these details last month due to regulatory requirements. This will equate to fewer than 80 job losses in Ireland, or 2 percent of the workforce here, the company has said.
A spokesperson in Ireland said many of the cuts here have not been implemented, but the integration of HP and Compaq in Ireland is going "smoothly and according to schedule."
In slashing 10 percent of its 150,000-strong global workforce, Hewlett-Packard says it wants to cut USD3 billion in costs by 2004, USD500 million more than the business had previously predicted. Importantly, the size and scope of HP, with its exposure to a broad range of technology products, has made the company more of a bellwether stock for the technology industry, thus analyst scrutiny will be all the more severe when its third quarter results are published on Tuesday.
Analysts on Wall Street are predicting that HP will report earnings per share of around USD0.14, compared to USD0.11 last year. This is the mean forecast from 20 analysts surveyed by Thompson Financial/First Call, whose predictions ranged from USD0.12 per share to USD0.16 per share.
Revenue is set to come it at around USD16.7 billion, Wall Street predicts, which would represent around 65 percent sales growth from last year's USD10.1 billion in revenue. Revenue estimates range from between USD16.2 billion to USD17.5 billion among the 15 analysts polled. The company has not issued a profit warning since its last set of results.
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