Hewlett-Packard has announced it plans to cut 14,500 jobs from its worldwide workforce over the next 18 months. The cuts would come mainly from the company’s support functions including information technology, finance, and human resources, although cuts are expected to extend to HP’s core business units which develop printers, servers, software, and PCs.
The move is the first major play by new HP CEO Mark Hurd as he tries to trim nearly $2 billion a year in costs, making the company compete more directly with other technology companies like Dell. The job cuts are the largest since former HP CEO Carly Fiorina terminated thousands of positions following HP’s 2002 acquisition of rival Compaq Computer. Fiorina, formerly one the most visible female executives in American industry, was ousted in February 2002. Hurd came to HP from NCR Corporation and took over as CEO on April 1.
In May, HP cut jobs in its printing and imaging business units, with roughly 2,000 workers accepting voluntary severance offers.
HP says the new job cuts will save between $900 million and $1.05 billion in its 2006 fiscal year, and produce an ongoing annual savings of $1.9 billion beginning in fiscal 2007, including $300 million in benefits savings and $1.6 billion in up-front labor costs.
"Decimate" means to reduce to reduce by one tenth; when a Roman legion or regiment displayed cowardice in battle, one soldier in ten would be chosen by lot and executed.
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