HP cutting 180 jobs in Australia

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.

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9 Comments

but...but they open sourced webos, everything should be great now..."rolls eyes".

hp is turning out to be the worst company i know next to rim.

Terrible news and I am really surprised I found this out through Neowin first.

HP is not competitive in the ICT/IT sector in Asia Pac. The only US based company that seems to get it right in region is Verizon.

For the financial year 2011 HP reported (Nov 21) net earnings of 7.1 billion dollars. How does that amount to "tremendous losses"?
Man, I whish I had that kind of losses.

MatthewW said,
For the financial year 2011 HP reported (Nov 21) net earnings of 7.1 billion dollars. How does that amount to "tremendous losses"?
Man, I whish I had that kind of losses.

Net earnings doesn't take into account their losses. Only, as it suggests, what they earned.

It also doesn't take into account separate business' under HP.

Nashy said,

Net earnings doesn't take into account their losses. Only, as it suggests, what they earned.


It also doesn't take into account separate business' under HP.

Wrong twice in the one post.

Net earnings does include the losses. HP still made very good profit in FY11.

Even if you look at the individual biz, the personal systems group made $200M profit in FY11. Usually this is ~$4B, but they took the 3B+ charge for WebOS related items.

Where are the losses?

I suggest you lookup what net earnings (or net income) means. E.g. try Wikipedia. You will see it does take into account losses. If you want to know what earnings per share is, you use net earnings.
Yes, I know HP consists of separate business'. Bringing that up is a non sequitur in my opinion.

MidnightDevil said,
Terrible news like this are everywhere Every company is cutting back

Yup, proof positive that the profit motive shouldn't be the only driving factor behind business. Too bad capitalism will never understand that concept.

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