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HP Posts Lower Profits, Sales; To Cut 27K Jobs

Palo Alto, Calif.
– Hewlett-Packard reported lower net earnings and net revenue in its fiscal
second quarter, ended April 30, and will cut 27,000 jobs, or about 8 percent of
its staff.

GAAP net earnings
were down 31 percent to $1.6 billion from the prior year’s second quarter, with
GAAP net revenue down 3 percent year on year to $30.7 percent.

In its personal
systems group, revenue was flat year over year with a 5.5 operating margin, and

revenue declined 4
percent year over year.

Revenue for its imaging
and printing group declined 10 percent year over year, with a 13.2 percent
operating margin. Consumer hardware revenue was down 15 percent year over year,
with a 13 percent decline in printer units.

As part of the
restructuring, HP expects the cuts to be made as of the end of fiscal year 2014.
The company is offering an early-retirement program, so the total number of
employees affected will be impacted by the number of employees who participate
in this plan. Workforce-reduction plans will vary by country, based on local legal
requirements and consultation with works councils and employee representatives,
as appropriate, HP said.

The restructuring
is expected to generate annualized savings in the range of $3 billion to $3.5
billion exiting fiscal year 2014, of which the majority will be reinvested back
into the company, HP reported.