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According to reports, the company said this month in a memo to workers that the environment for its major business lines -- computers, printers and IT services -- had changed since the USD19 billion merger with Compaq. As such, "HP has increased its total number of planned headcount reductions to 16,800 by fiscal year 2003," the memo reportedly said.
Initially, HP said 15,000 jobs would go as part of the merger, which created a high-tech behemoth that rivals International Business Machines and employs 150,000. To some degree, the new job losses confirm the suspicions of the merger's detractors, namely former HP board member Walter Hewlett, who said that more than 15,000 jobs would have to go as part of the integration of the two businesses.
What's more, HP executives hinted that more cuts could be coming when the business' third quarter results were released in late August. At the time, Chief Executive Carly Fiorina described the economy as "tough" and said there was more work ahead with regard to the firm's integration plans.
More importantly, however, other company executives said that workforce-related decisions would be based on market conditions and that the delayed economic recovery around the world and weaknesses in technology spending would continue to put pressure on HP.
In slashing 10 percent of its 150,000-strong global workforce, Hewlett-Packard said it wanted to cut USD3 billion in costs by 2004, USD500 million more than the business had previously predicted.
By the end of the third quarter, the business had already cut 4,740 people and said it was on track to trim 10,000 workers from its payroll by the end of October. Most of the rest of the cuts should be finished by the end of fiscal 2003, in October next year, HP said. Last week, HP said in a regulatory filing that 8,200 employees from the HP side of the business would be cut or would retire, while former Compaq employees would account for the remaining 8,600 positions to be eliminated.
Prior to the new job losses, it was expected that 5,900 jobs would be lost in Europe; the company had to reveal these details in July 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, due to the fact that most of Compaq's Irish businesses do not overlap with most of HP Ireland's activities.
A spokesperson for HP Ireland said on Thursday that the integration here was moving forward smoothly. At this point, however, it is unclear what impact, if any, the new job losses would have on HP's Irish employees, the spokesperson added.
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