This Is Why Hewlett-Packard Is Firing 58,000

Zero Hedge ^ | 02/25/2015 | Tyler Durden

[SeekAndFind]

The biggest scandal in today's release of Hewlett Packard Q1 earnings was not that, just as the Nasdaq is knocking on 5000's door, it reported revenues of $26.8 billion missing consensus expectations of $27.3 billion, while beating non-GAAP EPS by 1 cent to $0.92 (up from $0.90 a year ago) entirely due to a massive reduction in outstanding stock and some truly gargantuan non-GAAP addbacks (GAAP EPS declined from $0.74 a year ago to $0.73) pushing the stock down 7% after hours.

The biggest scandal was the company announced that having cut 44,000 workers so far, it will cut 58,000 jobs by the end of 2015. From Bloomberg:

• HP SAYS HAS CUT 44,000 JOBS TO DATE
• HP SAYS EXPECTS TO CUT 58,000 JOBS BY END OF FISCAL 2015

Incidentally, just 10 years ago Hewlett Packard employed a total of 58,000 people in the entire US.

So why is the company axing 58 thousand workers? Simple: so it can cut enough costs on top and continue to fund its now exponential surge in stock buybacks, which in the just concluded quarter was a record $1.6 billion, an increase of 178% from a year ago, and 66% more than the company spent on CapEx, in the process making its shareholders even richer while its management team get massive equity-linked bonuses.

Rinse. Repeat.

[C19fan]

But but..I am told there is a shortage of STEM workers and we need to imports millions from overseas.

[Buckeye McFrog]

This is the kind of story which, when heavily circulated by the mainstream press, is gonna get a Fake White Indian elected as your next POTUS.

[Wolfie]

Think of from top managment’s point of view. Nobody should have to get by with just 3 vacation homes.

[grania]

One can’t help but wonder if a little ways down the road HP will be hiring foreign STEM workers to meet the shortage. Or ship those jobs overseas if there’s too much scrutiny.

[RayChuang88]

This is because HP is getting out of the hardware business as much as possible and becoming more a computer services company. In effect, that’s what IBM has become—one of the world’s largest computer services companies, using IBM mainframe hardware to running the latest version of Red Hat Linux server editions to do large scale computations, large scale server storage and “cloud computing.” Indeed, many corporate web sites are hosted with the help of IBM.

[MadIsh32]

HP has a HUGE presence in India.

Won’t surprise me

[captain_dave]

HP is an old, mature tech company. It looks like it might go the way of Kodak..remember them?

[Old Retired Army Guy]

How many of those 58,000 in 2015 will be U.S. workers?

[Gaffer]

Personally, I think it’s all about the damned ink cartridges.

[baltimorepoet]

I’m about tired enough of the abuse of STEM workers in this country to leave, taking as much cash and precious metals with me as I can, and leaving behind as much student loan debt etc as possible.

I could go to a 3rd world country, or the Middle East (some place not infested by feminists or globalists) and start my life from scratch from a better starting position than where I am now.

[tbpiper]

Kodak..remember them?

Don't they make bears for Alaska?

[Gaffer]

You should read up on the horrific competition STEM students and eventual worker candidates have to undergo in countries like India.

[a fool in paradise]

in the process making its shareholders even richer

If the shares drop by 7%, the shareholders are not richer.

[dfwgator]

Yep, HP bought out EDS a few years ago.

[mad_as_he$$]

Flash is spinning in his grave.....

[null and void]

But but..I am told there is a shortage of STEM workers and we need to import millions from overseas.

Yeah. I head that a lot in the years between my last engineering job and my current one.

[baltimorepoet]

You should read up on the horrific competition STEM students and eventual worker candidates have to undergo in countries like India.

I was thinking about burying my money somewhere in northern Iraq, enlisting with the Kurds for several years to fight against ISIS, and then try to start over with a new name and new life in Kurdistan should I survive. (and go back with a shovel and dig up my money)

[hopespringseternal]

"Service" (consulting) companies like IBM charge exorbitant rates and return almost nothing of value. By outsourcing to them, executives are purchasing a scapegoat for their own failures. When a project goes badly, they just blame the consultants (IBM), then use them again anyway.

In the unlikely event the consultants need to actually return something of value, they outsource it to some programming sweat shop that produces a barely functional product.

I have seen this played out too many times to count. It is the normal course of a company. They start off innovative and creating useful products and wind up as a purely political entity serving no real purpose.

[NewHampshireDuo]

Kodak..remember them? .....Don't they make bears for Alaska?

Yeah, along with Polaroid.