Hewlett-Packard Cutting 10,000 Jobs By November

By Agence France-Presse Computer giant Hewlett-Packard Co. will slash 10,000 jobs by November, and follow with another 5,000 in 2003, CEO Carly Fiorina said June 4. The cuts had already been disclosed when HP completed its takeover of Compaq Computer last month. "Moving faster is good for employees and reduces uncertainty," Fiorina told analysts in Boston in the first such meeting since HP and Compaq merged. "We don't want to traumatize the organization multiple times." Fiorina said HP also will be able to cut more than $2.5 billion in non-layoff costs through integration of administration and facilities of the two companies. Cost cutting is going to be an HP mantra, as the company does not expect a rebound in the corporate or consumer technology sections any time in the near future. Company officials offered some predictions, telling analysts it expects gross margins in the second half of the year between 25% and 26% while sales are seen falling to between $35-36 billion from the $37.8 billion posted in the first half of the year, ending April. HP chief financial officer Bob Wayman said the company will take a restructuring charge of some $1.35 billion dollars in the second half of the year to end-October. Speaking to analysts, Wayman said severance costs for job cuts planned for end-October as a result of its merger with Compaq will total some $750 million. HP and Compaq survived a bruising half-year shareholders battle to finally combine forces, creating a computer company second only to IBM. Critics say the merger will be a major distraction to the company and join HP's destiny too closely to Compaq's fading computer manufacturing company. Fiorina has stridently argued that the tie-up was needed to compete in the shrinking technology markets. Copyright Agence France-Presse, 2002