HP revealed this week that it plans to cut 14,500 jobs, or about 10 percent of its workforce, by the end of 2006. The cuts will save the company $1.9 billion, the company says.
"Cost structures and revenue growth go hand in hand," HP CEO Mark Hurd said. "We know that only by having a competitive cost structure can we compete aggressively in the marketplace, thereby growing the company for our employees, customers, and shareholders."
Hurd replaced controversial ex-CEO Carly Fiorina about 4 months ago. Since then, he's been working to make HP more competitive in today's low-cost computing environment.
The jobs cuts, although unprecedented in HP's history and certainly painful, are considered necessary by analysts, who fear that the gigantic corporation became too slow moving and entrenched under Fiorina. Fiorina, for her part, refused to take on the epic task of making HP a smaller but more nimble company.
"If you looked at the great days of HP, when things needed to get done, they got done," Hurd said recently in an Associated Press (AP) interview. "This \[restructuring\] was something we needed to get done."