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Uploaded: Tuesday, September 11, 2012, 9:53 AM
Updated: Tuesday, September 11, 2012, 10:57 AM
HP to eliminate 2,000 more jobs
A total of 29,000 jobs to be cut by October 2014
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by Sue Dremann
Palo Alto Weekly Staff
Silicon Valley computer and printer giant HP will cut about 2,000 more jobs than previously announced, according to a Sept. 10 filing with the Securities and Exchange Commission. The company expects to shed 29,000 jobs by October 2014, according to the quarterly filing. As of July 31, HP had eliminated 7,300 positions since its 2010 plan began.
In May, HP announced that it was undergoing a company-wide restructuring that would include eliminating 27,000 jobs. The layoffs would trim the company's 350,000-strong workforce by about 8 percent. HP expects to implement the plan through the end of fiscal year 2014. The restructuring includes both a voluntary program for eligible U.S. employees and layoffs, the company noted in its filing.
HP also implemented a multi-year restructuring plan in the third quarter of fiscal year 2010, which includes consolidating its enterprise services business. Approximately 8,000 positions would be eliminated with severance packages. And 8,500 employees would take early retirement, according to the SEC filing.
The majority of early retirees were expected to leave by Aug. 31, and others were expected to exit through Aug. 2013, according to the filing.
Early retirees would receive lump sums ranging between five and 14 months of pay depending on years of service at the time of retirement under the program.
The retirees can also continue health care coverage at active-employee contribution rates for up to 2 years following retirement. Employees who are not grandfathered into certain employer-subsidized retiree medical plans could receive up to $12,000 in employer credits under the HP Retirement Medical Savings Account program.
Through 2014, the plan is expected to cost the company $3.7 billion. Most costs would be funded through its U.S. pension program. Of that amount, HP expects approximately $3.3 billion to relate to the workforce reductions and the early-retirement program. Approximately $.4 billion would relate to items including data center and real estate consolidation.
The company warned personnel reductions and other costs of restructuring pose significant risks.
Such risks that could "impair our ability to achieve anticipated cost reductions or that may otherwise harm our business include delays in … workforce reductions in highly regulated locations outside of the United States, particularly in Europe and Asia, decreases in employee morale and the failure to meet operational targets due to the loss of employees," the company noted in its filing.
HP's corporate headquarters is located at 3000 Hanover St. in Palo Alto.
Related story:
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Posted by Bill, a resident of the Fairmeadow neighborhood, on Sep 11, 2012 at 2:35 pm I thought Meg Whitman was the woman who created thousands of new jobs.
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Posted by Hmmm, a resident of East Palo Alto, on Sep 11, 2012 at 4:13 pm What happened to all of the other good comments on this thread???????????? Did Meg put her giant, expensively-clad foot down 7the comments were removed?
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Posted by Resident, a resident of Another Palo Alto neighborhood, on Sep 11, 2012 at 4:18 pm Such a shame Meg is not in Sacramento whittling down the number on the government payroll! Perhaps that would make the state budget balance.
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Posted by Greedy gains, a resident of the Greater Miranda neighborhood, on Sep 11, 2012 at 6:06 pm Meg could care less about whittling down government employees. She was in it solely to cut her capital gains tax down to zero.
Naked greed. It was her in platform and she would have done it.
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Posted by DDee, a resident of the Crescent Park neighborhood, on Sep 11, 2012 at 8:53 pm So, they are going to use the pension money to pay for the downsizing. Slick!
In other words, the workers and their years of contributions made toward the idea of a decent life in retirement are going to fund the company's giving them the wham bam thank you maam in its reckless and totally anti-patriotic rush to bolster the gain for the few at the top of the food chain.
Oh, who needs a pension when you can get a cash buyout of 5 to 14 whole months of salary to live the large life as you sweat it out trying to find another job in a depression-era economy.
But I suppose that is ok if you take all the recent US presidents past and present at their word to the effect that "these jobs are going and not coming back, what we have to do is retrain for the jobs of the future."
Uhhhh, which jobs might those be, I ask, since these were those jobs that people went into debt to retrain for!?
I think that karma might be coming round and showing all these valley tech folk that maybe they should have unionized those jobs when back they had the chance!
Or hey, maybe they should be standing WITH the few remaining civil servants in the police, fire, schools and public services who are just trying to hold on to what they were promised by contract, instead of joining the fat cats who are in the process of blaming all our woes on government workers (I don't see any government workers pushing HP to fire American workers by the way, all the contrary) and directing our frustration against our own allies who now work with lower staffing levels at the compromise of their health, safety and ability to serve the needs of their middle American neighbors.
Some contracts, bonuses and whatnots are sacred, even if they are with well healed thieves.... the rest of our contracts and expectations of fair play, not so much.
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Posted by musical, a resident of the Palo Verde neighborhood, on Sep 11, 2012 at 9:46 pm I haven't seen the details of the HP plan yet, but usually with a solvent company nobody loses any of their earned pension, and employees close to retirement often get to receive a full pension a year or two earlier than expected, PLUS the lump sum severance payment. It is the shareholders who cough up $3.3 billion for 29,000 eliminated positions, averaging $114,000 to each employee out the door. The IRS will get its cut.
The downsizing will take until Oct 2014, two years away. I don't know HP's normal retirement rate, but with 350,000 employees it must be close to 10,000 per year. That's 20,000 who would leave anyway. 29,000 is akin to incentivizing one additional year's worth to retire early. Of course the numbers are not that simple, and some of the lay-offs are bound to cause significant hardship during this overall difficult economy. But the company should emerge in a stronger position to be a workplace where employees will prosper in the future.
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