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Thursday, May 17, 2012

It Begins: H-P to Unload 25,000 employees...

I got a question for you. How many MBA's does it take to get 25,000 people laid-off?  Ignore that.

The rest of the world see's output waning, the largest company in the world builds devices without the ability to print and the smartest people in the room cancel a tablet after 49 days.  Quick, get that drawer statement out.

Right now, it's too easy to kick Mother Blue in the chops - it is good to remember that "25,000" isn't just a figure on a screen - it represents 25,000 fathers, mothers, sons and daughters - families.

Dare I say, believers.  So to mock the poor souls taking early retirement or collecting pink slips, is cruel.

I won't do that.

I will say this - its easy to snicker and sneer at the mighty as they fall - especially the arrogant.  But we do not live in a vacuum and we are no longer islands.

I wrote a quip back in September referring to whenever HP sneezes, the rest of us get Zombie Flu.

I fear the trickle-down ramifications of a larger print OEM contracting Zombie Flu. What the hell is going to happen to all the 'little-people'?

Huh.  No worries, we're ready.

From around the interweb, first reports of this latest disturbance in the Force.

From Houston Business Journal, May 17:

The source told Business Insider that HP wants to downsize its workforce — which totals 320,000 worldwide — by 10 percent to 15 percent, though Business Insider doesn’t expect the company to eliminate that many jobs all at once. Also, manufacturing employees are not expected to be hit as hard as others, Business Insider said.

From Business Insider, May 16:

Layoffs are going to be significant. 

At least, they'll be bigger than what Whitman has said so far. She's said that layoffs would NOT be "broad-based" at least in China (whatever that means), but she didn't say anything about the rest of the worldwide workforce.

Our source said HP wants to trim its workforce by 10%-15%. Given that HP has 320,000 employees, a 10% reduction would be 32,000 workers gone. However, that would include an early retirement program. 

We'd guess that this would include attrition, too, where new hires don't come in when employees leave. That number sounds high and we don't expect HP to promise it next week, because HP will also want to shift some jobs offshore. So, HP's total workforce numbers won't reflect all of the cuts.

Barron's, May 17 -

Business Insider’s Julie Bort this morning is back on the corporate layoff beat, writing that one unnamed source at Hewlett-Packard (HPQ) tells her that there will be “massive” job cuts at the company, perhaps as much as 10% to 15%, or 32,000 to 48,000 workers.

ISI Group’s Brian Marshall this morning writes that a so-called Reduction in Force would “improve confidence in HPQ’s guidance for ‘at least $4.00 in EPS in fiscal 2012′ and enable investments in strategic, higher-growth areas.’” Marshall has a Buy rating on HP shares.

ZDNet, May 17 -

HP’s operating profit per employee trails rivals, according to a Morgan Stanley analysis.

For instance, IBM’s operating profit per employee is $49,000. Apple’s is the same. EMC makes $67,000 in operating profit per employee.

HP’s tally: $35,000.

The only way for HP to change that metric—assuming the company can’t suddenly boost growth—is to lay off workers.

And of course there is this:

Number of people seeking jobless benefits unchanged last week

The number of people seeking unemployment benefits was unchanged last week, suggesting steady gains in the job market.

The Labor Department said Thursday that weekly unemployment aid applications stayed at a seasonally adjusted 370,000, the same level as the previous week. The four-week average, a less volatile measure, fell for the second straight week, to 375,000....


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