Hewlett-Packard (HP) announced an 18% rise in profits to $1.3 billion for the second quarter in a statement that was accidently released before US stock markets closed.
The tech giant said that despite rising profits, it plans to lay off an additional 11,000 to 16,000 workers.
HP had previously announced it would cut 34,000 jobs as part of a restructuring announced in 2012.
HP said that despite rising profits, it plans to lay off an additional 11,000 to 16,000 workers
Shares in HP fell after the early release of the news.
HP CEO Meg Whitman said in a statement: “I’m pleased to report that HP’s turnaround remains on track.”
“We’re gradually shaping HP into a more nimble, lower-cost, more customer- and partner-centric company.”
However, analysts were disappointed by HP’s revenue growth, which fell 1% from the same period a year ago to $27.3 billion.
HP has been hit hard by declining PC sales as consumers shift towards devices such as tablets and smartphones.
Meg Whitman has tried to shift the firm’s focus to computing equipment and networking gear for business clients.
HP began a restructuring plan in 2012 that was designed to simplify the company’s business processes, accelerate innovation, lower costs and deliver better results.
Meg Whitman said the turnaround remains on track, and added: “With each passing quarter, HP is improving its systems, structures and core go-to-market capabilities.
“We’re gradually shaping HP into a more nimble, lower-cost, more customer- and partner-centric company that can successfully compete across a rapidly changing IT landscape.”
HP has not specified when it expects to see the full results of its restructuring strategy. But analysts are suggesting the company should probably take a closer look at its product mix.
HP’s personal systems division was the only segment that showed a gain in revenue in the second quarter. Other divisions, namely printing as well as enterprise group and services posted a drop in revenue.
The decline in revenue is one of the main reasons HP is cutting jobs.
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Lenovo has replaced Hewlett-Packard as the world’s top PC maker, according to preliminary figures released by research firm Gartner.
Gartner said Chinese PC maker Lenovo shipped 13.8 million units in the third quarter, compared with HP’s 13.55 million.
It said Lenovo’s “aggressive” price cuts had helped it gain substantial market share.
However, research firm IDC’s data put HP at the top, though it showed the gap between the two was closing.
According to IDC, HP shipped 13.9 million units, giving it a 15.9% share of the global market, compared with Lenovo which enjoyed a 15.7% share with 13.8 million units.
Analysts said Lenovo has been among the best performing PC makers in recent times and it was likely to gain further market share.
“Just the momentum that Lenovo has had, makes it inevitable that it will be the world’s number one PC maker across all charts,” said Andrew Milroy of Frost & Sullivan.
According to Gartner, Lenovo was the only PC maker, among the world’s top five, that increased its shipments to the US during the third quarter.
Both Gartner and IDC’s figures showed that global PC shipments fell more than 8% during the quarter, from the same period last year.
Demand for personal computers has been hurt by a slowing global economy as well as the growing popularity of tablet PCs such as Apple’s iPad and Samsung’s Galaxy range.
Analysts said that consumers held back on purchases during the period in anticipation of the launch of new products as well as operating systems, including Microsoft Windows 8.
“PCs are going through a severe slump,” said Jay Chou, senior research analyst at IDC’s Worldwide PC Tracker.
“The industry had already weathered a rough second quarter, and now the third quarter was even worse.”
He added that the industry was also struggling to find a product that may help it turn around its fortunes.
“The hard question of what is the <<it>> product for PCs remains unanswered. While ultrabook prices have come down a little, there are still some significant challenges that will greet Windows 8 in the coming quarter.”
Hewlett-Packard, the world’s largest maker of personal computers, is planning to cut 27,000 jobs by end of 2014.
Hewlett-Packard said the cuts – about 8% of its workforce – will reduce costs by up to $3.5 billion a year.
The company said in a statement that the money would be reinvested.
The move was part of a “productivity initiative designed to simplify business processes” and comes as rival products such as the iPad tablet computer eat into HP’s sales.
As part of the changes, the head of HP’s Autonomy division, Mike Lynch, is being replaced by Bill Veghte, HP’s chief strategy officer. Mike Lynch will leave after what HP called a “transition period”.
Hewlett-Packard, the world's largest maker of personal computers, is planning to cut 27,000 jobs by end of 2014
Mike Lynch founded software company Autonomy as a small start-up and turned into one of the UK’s largest technology companies.
It was bought by HP last year for more than $10 billion.
HP employs about 350,000 people worldwide and about 20,000 in the UK. A spokesman said it was too early to say exactly where the job cuts would hit, but no part of the business would escape some losses.
“We have not yet announced specific plans with regards to specific locations. We do expect the workforce reduction to impact just about every business and region,” the spokesman said.
News of the job losses overshadowed the release on Wednesday of HP’s latest quarterly results. The company’s profits and revenues were both better than analysts had estimated.
California-based HP reported a 31% fall in profits in the second quarter to $1.6 billion. Revenue in the period fell 3% on a year ago to $30.7 billion.
Meg Whitman, HP’s chief executive, said: “This quarter we exceeded our previously provided outlook and are executing against our strategy, but we still have a lot of work to do.”
The former chief executive of eBay joined HP in September, vowing to turn around the company after a series of problems including a failed tablet computer and an announcement that it was considering an exit from the PC business.
Her predecessor, Leo Apotheker, was ousted after just 11 months on the job.
HP’s shares, which fell as much as 5% on Wednesday and closed 3% down, were up 6.6% in after-hours trading on Wall Street.