HP slashes 850 positions in Germany; plan will cut 27,000 employees worldwide
HP (NYSE: HPQ) is cutting 850 positions at its Enterprise Services business in Germany and shutting down its Ruesselsheim facility as part of its global restructuring plan to dig itself out of the financial hole created by Autonomy and other struggling units.
The cuts amount to 77 percent of the workforce at the Ruesselsheim facility. The remaining workers will be shifted to HP partners and clients, HP said in an announcement.
HP said it plans to focus its Enterprise Services business, which includes its Electronic Data Systems acquisition, on cloud services and information management as well as improving accountability of executives and cost structure. "HP Enterprise Services has an aggressive plan to optimize its portfolio and its sales and delivery model, and to improve its cost structure, resource management and operations," said Mike Nefkens, executive vice president of HP Enterprise Services.
As part of its global restructuring plan, HP will eliminate 27,000 employees, or 7 percent of its workforce, by the end of fiscal year 2014. The company hopes to cut between $3 billion and $3.5 billion in expenses, according to the plan announced last May.
In its most recent quarter, HP reported a staggering $6.9 billion net loss, which it blamed on a noncash impairment charge of $8.8 billion related to its acquisition of Autonomy, a British big data analytics firm that helps enterprises mine the data they generate.
HP blamed the huge charge on financial irregularities at Autonomy prior to its purchase by HP, a charge that the former chief executive officer of Autonomy, Mike Lynch, vehemently denies.
HP is charging ahead with efforts to turn around its financial fortunes. On Monday, the company announced that will sell its first Google Chromebook laptop. The HP Pavilion 14 Chromebook, priced at $330, provides a 14-inch screen, 16 GB solid-state drive and Intel Celeron processor, as well as 100 GB of free storage on Google Drive for two years.
The struggling IT behemoth is hoping Google's Chromebook operating system will prove more attractive to buyers than the Windows 8 OS sales, which HP said have been disappointing, according to a report by Bloomberg.