Hewlett-Packard Co said it will cut 25,000 to 30,000 more jobs as part of a $2.7 billion restructuring, mainly focused on its enterprise-services division.
The cutback is happening as HP is splitting into two listed companies later this year, with one named Hewlett Packard Enterprise supplying businesses with high-end technology, and the other, HP Inc., selling personal computers and printers. The split is expected to be made final on Nov. 1.
The job cuts amount to about 10 percent of the company's 300,000-employee global workforce. Previously, the company had revealed $2 billion in probable cost cuts at the services division within Hewlett Packard Enterprise, and has found an additional $700 million in savings across the business, said Tim Stonesifer, chief financial officer of Hewlett Packard Enterprise.
The other cuts will result in site closures and the reductions of those, and further reductions of workforce across the wider portfolio, Stonesifer said at the event.
As part of a restructuring announced in 2012, 54,000 jobs have already been cut at the company. The cuts announced Tuesday are the most among North American companies this year, according to data compiled by Bloomberg.
The split, announced last October, is designed to help the company compete better with tech giants such as Amazon, Google, IBM and Microsoft in the rapidly-growing business of renting access to servers and services for storage of data. According to a market researcher IDC, the cloud computing market is estimated to be worth $70 billion this year.
Hewlett Packard Enterprise is expected to begin trading on November 1 on the New York Stock Exchange under the ticker symbol HPE. Despite the upheaval, HP remains one of the world's biggest technology companies.
Chief executive Meg Whitman is scheduled to become president and CEO of Hewlett Packard Enterprise while serving as board chairman of HP Inc. The enterprise unit is expected to have more than $50 billion in annual revenue, Whitman told investors.
Since 2011, the company’s enterprise services business has lost about $4 billion in annual revenue. At the event, Whitman likened the losses to water draining from a bathtub.
Hewlett Packard Enterprise said it sees revenue from its cloud-related businesses growing more than 20 percent annually for the next several years. The PC and printer focused HP Inc. will work on returning cash to shareholders while also expanding into new markets such as 3-D printing, Ms. Whitman said.