HP Sees PC Growth as it Trims Workforce

As part of a massive restructuring, HP announces new layoffs during its second quarter fiscal 2014 earnings call, yet points to light at the end of the tunnel. 

Hewlett-Packard (HP) is in the midst of a massive restructuring effort that will see as many as 50,000 employees leave the company. HP announced new layoffs during its second quarter fiscal 2014 earnings call on May 22.

For the quarter, HP reported revenue of $27.3 billion, which is a one percent year-over-year decline.

Meg Whitman, CEO of HP said during her company's earnings call that an additional 16,000 employees will leave the company under a restructuring program first announced in 2012.

"This will bring the total number of employees leaving under the program to as many as 50,000," Whitman said. " No company likes to reduce their workforce but the reality is that HP must be focused on continuous improvement in our cost structure."

Whitman said that HP has increased the number of people who will leave the company a couple of times since the restructuring program was first announced in 2012.

"I am actually not disappointed at all with how we're doing, we just see more opportunities to lower our cost structure and streamline our operations without impairing our effectiveness, in fact making us a more nimble and decisive company," Whitman said.

HP's CEO also defended the layoffs as having nothing to do with HP's confidence in the business.

"This has to do with really now understanding the opportunities that we have to make this company better," Whitman said. "You’ve got to remember, this company was built over many years by acquisition, has five major business units, we operate in 166 countries and as you look at our processes, as you look at how we go to market, as you look at things like sales reps and marketing and e-commerce, there are so many opportunities to improve this company."

One particular area in which HP saw growth during the second quarter was in its personal system business unit. For the quarter, HP reported personal systems revenue of $8.2 billion for a 7 percent year-over-year gain.

"Overall, we’re seeing a slowing market contraction and signs of stabilization, particularly in commercial PCs," Whitman said. "This is coupled with support from a refresh of an aging installed base and the expiration of Windows XP."

HP's x86 server business is also growing and Whitman noted that revenue for industry standard servers grew for the third consecutive quarter.

There is also potential growth in HP's hyperscale server computing effort known as Project Moonshot.

"We continue to see good customer interest in Moonshot with over 100 beta customers and engagements through our discovery labs and over 40 partners in the program," Whitman said. " While we are seeing a ramp in Moonshot revenue, we don't anticipate this will become material in the near term, however we believe Moonshot is on its way to becoming a disruptive product in a new category of servers."

Sean Michael Kerner is a senior editor at Datamation and InternetNews.com. Follow him on Twitter @TechJournalist

Photo courtesy of Shutterstock.




Tags: cloud computing, earnings, HP, Moonshot


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