Tablets and smartphones are replacing PCs for many consumers and businesses, and Hewlett-Packard is feeling the sting. The company says it will lay off 27,000 workers in a restructuring effort aimed at saving up to $3.5 billion a year. HP was the world’s largest personal computer maker until the fourth quarter of last year, when Apple’s iPad outsold all of HP’s personal computers.
HP employs about 350,000 people, so the layoffs will impact about 7.7% of the workforce. The company says the cuts will not be complete until the end of fiscal 2014, and that it hopes to accomplish many of them through early retirement offers.
Bad news for employees is often good news for investors, but Wall Street’s enthusiasm for HP’s news was short-lived. The company’s stock price rose more than 6% initially on news of the restructuring, but gave up most of that gain by mid-afternoon. HP has lost about 40% of its value during the last year.
The layoffs, which had been predicted last week in media reports, were confirmed Wednesday during HP’s second quarter earnings announcement. The Palo Alto, Calif.-based company reported net income of $1.6 billion, or 80 cents per share, on revenue of $30.7 billion. Net income was off 30% from the year-ago quarter.
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