HP plans 3,000 to 4,000 job cuts over the next three years. HP told some employees to choose between becoming contractors with no benefits or being fired without severance.
Nowadays, HP is lining up outsource jobs for some of these workers that get them off payroll but has them staying to work on HP's projects or with HP's consumers. HP Inc requires 3,000 to 4,000 employees to exit within the fiscal years, 2017 to 2019.
The details are still somewhat uncertain, with the report noting that "changes to the workforce will vary by country, based on local legal requirements and consultations with employee works councils and other employee representatives, as appropriate."
HP confirmed us that it was cutting its workforce by obtaining option jobs for workers, saying it was doing this only for a "small number" of workers. A representative told us:
HP reached an agreement with a strategic labor partner to allow more flexibility in managing labor demands. There are a small number of employees who will move from HP and become contractors to HP's Mobility and Workplace Services organization. HP will continue to own and manage the end-client relationship and overall service responsibility.
A Billion Dollar Per Year
HP has spent roughly $1 billion a year on layoffs and restructuring for the past seven years, ever since HP acquired EDS in 2008 and formed the HP ES unit. EDS nearly doubled HP's headcount, from 172,000 to more than 311,000.
Meanwhile, the unit has been narrowing in profits for years, as outsourcing has gone out of favor although cloud computing is on the rise.
Throughout the year 2015, Whitman has told investors she is supporting and stabilizing the unit. She believes that she is committed to it that is why she is she is maintaining that thin . She promised to bring margins up to 7% to 9% and she's doing that through restructuring the labor pyramid or the pyramid of capital system.
HP will split into two companies on November 1 and HP ES will become part of the HP Enterprise company, with Whitman as CEO.
Let us just wait for the further announcement of HP. Who knows if this decision can be changed or not. For now, let us jus cheer for HP.
