HP Shares Fall on Light Results; Plans to Cut up to 16,000 More Jobs
Computing giant Hewlett-Packard just reported results for its second fiscal quarter about 20 minutes earlier than scheduled, and the press release appears to be incomplete. They're more or less in line with the consensus …
Context & Ripple Effects
HP's miss lands six months after the company beat Street expectations and watched its shares rise in its November 2013 fourth-quarter report — so this quarter reverses that narrative rather than extending a slump. The botched release itself (results posted roughly twenty minutes early and appearing incomplete) adds an execution blemish on top of the numbers.
The deeper arc is headcount: back in May 2012, Bloomberg reported HP was weighing cuts of as many as 25,000 jobs, and today's plan to shed up to 16,000 more confirms restructuring has become the company's standing operating mode. The story traveled widely — Gigaom, Fortune, Engadget, Business Insider and four other outlets all picked it up within a day.
First-order effects
- Up to 16,000 additional HP employees face layoffs, layered onto whatever workforce reductions were already underway from the earlier rounds.
- Investors repriced the stock immediately on the lighter-than-expected second-fiscal-quarter results, erasing the goodwill from the November 2013 beat.
Second-order effects
- Suppliers and enterprise buyers now have to discount the reliability of HP's roadmap: repeated restructurings tend to slow product cycles and shift sales-force attention to retention over expansion.
- Rivals in PCs and printers gain a window to court disaffected HP customers and sales talent while the company absorbs another round of cuts.
Third-order effects
- If each soft quarter is answered with another multi-thousand-job announcement, legacy hardware economics — shrinking margins met with payroll cuts rather than new growth bets — hardens into industry practice.
- Persistent shrinkage also pressures HP toward structural answers beyond cost-cutting, such as portfolio separation, as investors run out of patience with incremental restructuring.
The trend: Legacy PC-and-printer vendors are managing secular decline through successive mega-rounds of layoffs, turning annual restructuring into a core financial strategy rather than a one-time reset.