Mass layoffs loom for HP

HP chief Mark Hurd has previously cited cost cutting as a priority

HP is expected to initiate a corporate restructuring within the next two weeks that could see as many as 15,000 layoffs.

Analyst firm Sanford C. Bernstein & Co said that HP could slash between five and 10 per cent of its 150,000 employees. Other analysts are predicting similar figures.

The threat of mass layoffs has hung over the vendor ever since Mark Hurd took over as chief executive from Carly Fiorina last March. Hurd has repeatedly said that he sees cutting costs as his primary mission, but has been short on details. 

HP has realigned some of its senior management positions in recent weeks, hiring a former PalmOne executive to head up the systems group that makes desktop and laptop computers, as well as snatching a chief information officer from Dell. 

Although some rumours suggest that the layoffs will be announced on Monday, Michael Dortch, a principal analyst with the Robert Frances Group, expects the cuts any time within the next two weeks.

"HP's enterprise customers are worried [about the future]," Dortch told vnunet.com. "The longer HP waits, the more opportunity Sun and IBM are going to have to talk to those people and the more likely it is that HP is going to lose them."

The analyst argued that, even if HP has no intention of firing any staff, it should reassure enterprise users by making a statement either way.

Dortch added that the question is not whether there will be mass layoffs, but which divisions will be hit hardest.

Enterprise users need reassurance that they can keep investing in HP hardware in the long term. If cost cuttings centre around the server and services parts of the company, some users are likely to switch vendors.