HP Printing Out 5,000 To 25,000 Pink Slips

The long awaited restructuring under new CEO Mark Hurd begins, with massive layoffs starting next week.

So much for the honeymoon between Mr. Hurd and a lot of Hewlett Packard’s employees. In a move widely expected by Wall Street analysts, the technology company will chop away a portion of its 150,000-member work force.

HP has not provided any public guidance yet on potential layoffs, nor on where in the world the layoffs might take place.

“H-P has a cost structure that is off benchmark in many areas,” Mr. Hurd said in May. That publicly stated contention, coupled with his recruitment of former Dell CIO Randy Mott to HP, look like they were indicators of this move. Dell has reached the top spot as a global PC maker, and is famed for its cost controls.

Analysts predicted a range of cuts would reduce non-essential research and development efforts; some advertising campaigns and sales force processes will likely be impacted too, according to the Wall Street Journal.

Slashing R&D along with advertising appears to be a risky proposition. Those “non-essential” development efforts of today could lead to a breakthrough tomorrow. HP may feel it can better target advertising efforts at a lower cost, given the rise of Internet usage and the online ad market.

Investors and financial analysts will probably approve of the cuts. An analyst at Putnam Investments, holder of 31 million shares in HP, agrees with this. “There’s lots of potential for cost reduction,” said Hugh Mullin.

David Utter is a staff writer for murdok covering technology and business. Email him here.