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HP to cut up to 30,000 more jobs
2015-09-16 08:46:00| Telecompaper Headlines
(Telecompaper) HP announced plans to cut another 25,000 to 30,000 jobs, as part of its plans to split into two companies. At an analysts meeting on the future of HP Enterprise, the company said it targets USD 2.7 billion in annual cost reductions following the demerger, in order to reach its long-term target for an operating margin of 7-9 percent. The restructuring will result in one-time costs totaling USD 2.7 billion, to be taken from fiscal Q4 over the next three years. HP forecast annual growth in organic revenues and operating profit in fiscal 2016. Revenue growth will be driven by continued strength in servers, storage and networking, and stabilization in services and software, helping to offset negative currency effects. The continued focus on supply chain productivity, a disciplined approach to discretionary spending and the shrinking workforce will help profit reach an estimated USD 0.75-00.85 per share in the coming year. Adjusted EPS is forecast at USD 1.85-1.95 and excludes the around USD 1.10 per share in charges for the spin-off and restructuring. HP Enterprise expects to generate USD 5.0-5.2 billion in cash flow from operations and USD 2.0-2.2 billion in free cash flow in fiscal 2016. This includes separation cash payments of USD 0.4 billion and restructuring cash payments of USD 1.2 billion. At least 50 percent of free cash flow will still be returned to shareholders, in the form of USD 400 million in dividends and the remainder in share repurchases.
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Category:Telecommunications