Troubled PC maker raises layoff estimate as it struggles with services swoon and competition from mobile device makers.

Paul McDougall, Editor At Large, InformationWeek

September 11, 2012

3 Min Read

8 Key Differences Between Windows 8 And Windows RT

8 Key Differences Between Windows 8 And Windows RT

8 Key Differences Between Windows 8 And Windows RT (click image for larger view and for slideshow)

In the wake of the worst quarterly loss in its history, Hewlett-Packard said it would cut 2,000 more jobs than originally planned, bringing the number of layoffs announced by the computer maker this year to 29,000, or 8.6% of its total headcount.

HP did not formally announce its revised layoff plan, but disclosed the new numbers in a quarterly report filed Monday with the Securities and Exchange Commission. HP in May disclosed a sweeping restructuring plan, and said associated layoffs would total 27,000.

"It’s more than they said last time, but who's to say it's not going to get higher if things get worse?" Topeka Capital Markets analyst Brian White told Bloomberg. "They've got a lot of wood to chop, and this is a long-term turnaround story."

In its SEC filing Monday, HP said that it had already laid off 3,800 workers as of July. It said it now expects the total cost of its restructuring to reach $3.7 billion through 2014, $200 million more than originally expected.

[ They're here, but does anyone care? See Nokia Windows Phone 8 Devices Arrive With Thud. ]

HP remains the world's number-one PC maker. But the market is shrinking as an increasing number of consumers and workers turn to mobile devices such as smartphones and tablets for their computing needs. HP, along with software partner Microsoft, has failed to develop a strong presence in the mobile market.

HP also has struggled to make good on its $13.9 billion acquisition of IT services giant Electronic Data Systems. Since closing the deal in 2008, the company has made little progress establishing itself as a leader in the outsourcing market.

Last month, HP shook up the unit, replacing services chief John Visentin with senior VP Mike Nefkens. HP also wrote down the value of its EDS unit by $8 billion. The move led HP to report a per-share loss of $4.49 last month, the worst in its history.

HP is hoping its fortunes will improve with the arrival of Windows 8 next month. On Monday, the company unveiled three new lines of Windows 8-compatible PCs.

The Envy, which starts at $799, and SpectreOne, starting at $1,299, are designed to work with Windows 8's touch-friendly Live Tiles interface. The $499 Pavilion uses standard mouse and keyboard input.

Microsoft has said Windows 8 and related systems will be available to the general public starting Oct. 26.

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About the Author(s)

Paul McDougall

Editor At Large, InformationWeek

Paul McDougall is a former editor for InformationWeek.

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