Global PC giant HP have announced their reinvestment scheme that will see them axe 27,000 jobs by 2014. This number represents 8% of their total workforce and will save them $3.5 billion. This move will allow them to invest in growth areas such as cloud computing, big data and security. It will also invest in marketing, research and development and other unspecified tools that “simplify” the customer experience.
The announcement comes as HP reported a 31% profit decline in its second quarter to $1.6bn (£1bn). Revenue dropped 3% to $30.7bn (£19.6bn). HP is expected to take a pre-tax charge of $1.7bn (£1.1bn) in 2012 due to the restructure.
Much of Hp’s weaning profits have been eroded by an increase in the popularity of tablet devices like the iPad which see’s consumers favouring this type of product over a traditional laptop/PC. HP’s lack luster TouchPad was canned after disappointing sales, despite being supported by a multi million pound global marketing campaign. Meg Whitman, Chief Executive, has confirmed HP will be launching a new Windows 8 tablet by the end of this year in an attempt to gain a foothold in the tablet market.
Whitman commented “While some of these actions are difficult because they involve the loss of jobs, they are necessary to improve execution and to fund the long term health of the company.”
As part of the changes, the head of HP’s Autonomy division, Mike Lynch, is being replaced by Bill Veghte, HP’s chief strategy officer. Mr Lynch will leave after what HP called a “transition period”.