Essay Hp Plans to 'Cut 30,000 Jobs'

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HP plans to ‘cut 30,000 jobs’ INTRODUCTION According to the news, many companies have and are still experiencing retrenchment in recent years. One of these companies is Hewlett-Packard, also known as HP. HP’s chief executive officer Meg Whitman, plans to cut approximately 30,000 jobs to save cost on employment. Her goal is to spend the money she saved on employment on increasing the efficiency of the company’s sales force and on creating new products. One of HP’s senior executive mentioned that Ms Whitman is ‘trying to build a new company’. Such measures have to be taken as the net earnings of HP has dropped by 44% during the first quarter of its fiscal year and the company has lost much of its share price. STRUCTURAL UNEMPLOYMENT …show more content…
One of the victims of this retrenchment is Mike Lynch, the founder of Autonomy, the British search company bought over by HP for $10 billion by Apotheker last year. The reason for his dismissal was that Autonomy has suffered “very disappointing” licensing revenues as told by Whitman during a conference call. The unemployment will cause many who are not able to find a job quickly to lose their income. Also, production and human capital will drop. Lost production means lower consumption and a lower investment in capital, which lowers the living standard in both the present and the future. Prolonged unemployment permanently damages a person’s job prospects by destroying human capital. DISCUSSION Ms Whitman’s predecessor Léo Apotheker served less than a year, during which time the company lost about 43% of its share price, equivalent to more than US$32 billion in market capitalisation. HP should have earned its spot in smartphones and tablet markets after acquiring Palm, a once well-known PDA manufacturer. But instead of doing so, Apotheker decided to cancel its WebOS product line, causing HP to sell off the surplus stocks of the Touchpad tablets that have already been produced at a much lower price. However, the response for the Touchpad was shockingly better than expected and hence HP decided to continue

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