HP disclosed the cuts Tuesday after reporting a 3.2% drop in revenue and a 17% decline in profits for the fiscal quarter ended April 30. The additional job cuts amounted to 2% of its workforce. In addition, HP provided a lackluster forecast for the fiscal year, which sent its shares down 5% in after-hours trading.
Unlike other tech companies, HP does not see an improvement in the economic recession. In an interview with The Wall Street Journal, HP chief executive Mark Hurd said the spending climate in the current quarter "looks the same" as the previous quarter. Hurd later told financial analysts during a conference call, "I'm not ready to call it better."
HP's latest financial results were in line with Wall Street expectations. The revenue drop was the first year-over-year quarterly decline since Hurd became CEO in 2005, the Journal said. The decline was caused by a drop in sales of PCs and printers.
However, HP's forecast sent its shares down in after-hours trading. As of midday Wednesday, HP shares were down 4.7%. For the current quarter, HP expects earnings from 88 to 90 cents a share on revenue predicted to be flat to down 2% sequentially. For the full fiscal year, HP expects profits to remain in line with previous estimates, but said revenue would fall 4% to 5%. HP had previously predicted a drop of 2% to 5%.
The latest round of job cuts is not part of workforce reduction under way as a result of HP's purchase last year of EDS for $13.9 billion. EDS was started in 1962 by one-time presidential candidate Ross Perot.
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