As part of HP's global transformation to get the failing business on track, the computer giant announced today that it will let more than 180 workers in Australia go as part of a $1 billion transformation project. According to The Australian, the job cuts are to cull a $30 million USD per month "burn rate" on contract labor.
HP experienced tremendous losses in 2011 when it failed to gain traction with WebOS, which the company purchased off Palm for the cool price of $1.2 billion. CEO Leo Apotheker announced in August that WebOS was to be discontinued, and that the company was considering spinning off it's Personal Systems Group (the part of the company that creates consumer facing PC's).
The company then ousted Apotheker after just 11 months as CEO, due to poor results and terrible choices within the company. Reportedly, the HP board did not even meet Leo before hiring him, and allowed him to replace half of the board who were supposed to be overseeing him. As a result, he was replaced by Meg Whitman, of eBay fame, who then took a very extended amount of time to decide if she wanted to keep WebOS alive, and whether or not the company even wanted the PSG group. In October, it was announced that PSG would stay a part of HP and finally, in December it was announced that WebOS would be made open source.
Unfortunately, as a result of this, the company was down 10% on profit in 2011 compared to the previous year, and they took a $3.3 billion blow to their bottom line due to the WebOS fiasco.
The move today by the company was not surprising, but local staff had not been sure of their jobs until today. According to HP, 70% of the job cuts will happen in Melbourne, with the remainder in Sydney, and the roles varying from project managers to analysts and subject matter experts.
The announcement is part of a multi-year transformation plan that "comprises of several projects, including data center consolidation, and is aimed at standardizing service offering and automating internal processes to ultimately reduce costs."
HP said yesterday that "Over the Christmas break, shut down activities have accelerated and global has advised us that we need to action shutdown activities for affected (transformation) programs" and that they had "communicated all other transformation programs would either move to regional funding or stop. Effective immediately all other programs will be shut down." Apparently no regional funding was secured from HP Australia.
The company warned that some customers could be impacted by the workforce reduction, but said that the move will benefit their clients with new services and processes.