As new HP CEO Meg Whitman recovers from her trip to China, where HP introduced 80 products at a two-day conference, rumors of up to 30,000 company layoffs are circulating. HP's commitment to the Chinese market seems clear, whereas its vision for the US remains cloudy, with a chance of unemployment.
Forbes reports that Whitman is embracing the Chinese tech market, saying:
HP has signaled that it will begin to consolidate and solidify its product lines, which will mean fewer models overall and to some extent headcount reduction. But Whitman assured the room that there would be 'no broad-based workforce reductions in China.' In smaller conference sessions, product leaders indicated that brands also would be simplified."
Use the Source
HP hasn't formally responded to the rumors yet, but is expected to make announcements this week. The rumors and reports about the upcoming layoffs can be traced back to one person, actually, "one source." Business Insider, for example, cites "one source" as saying the job cuts will be massive. The source says HP will trim its workforce by 10-15%, which could mean an additional 32,000 or more unemployed people soon.
Business Insider says that manufacturing staff won't be affected as much as other areas of HP, but the HP Services business unit will be exceptionally hard hit.
And now comes the blame game. Business Insider reports:
CEO Meg Whitman and crew have laid the blame on employee costs such as their salaries. Employees say the problem is one management blunder after another."
Whitman joined HP late last year, but the Q1 figures show noticeable revenue decline. When she joined HP, Whitman laid out a strategy for 2012 that included developing the talent and products the company already has. She said:
We need to be consistent; no more surprises… We need to get back to the business fundamentals in fiscal 2012, including making prudent investments in the business and driving more consistent execution."
Still, 30,000 layoffs does sound surprising, inconsistent and hardly a prudent "investment" in the business. Perhaps prudent investments were referring to HP's focus on China?