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This Is Why Hewlett-Packard Is Firing 58,000

The biggest scandal in today's release of Hewlett Packard Q1 earnings was not that, just as the Nasdaq is knocking on 5000's door, it reported revenues of $26.8 billion missing consensus expectations of $27.3 billion, while beating non-GAAP EPS by 1 cent to $0.92 (up from $0.90 a year ago) entirely due to a massive reduction in outstanding stock and some truly gargantuan non-GAAP addbacks (GAAP EPS declined from $0.74 a year ago to $0.73) pushing the stock down 7% after hours.

The biggest scandal was the company announced that having cut 44,000 workers so far, it will cut 58,000 jobs by the end of 2015. From Bloomberg:

  • HP SAYS HAS CUT 44,000 JOBS TO DATE
  • HP SAYS EXPECTS TO CUT 58,000 JOBS BY END OF FISCAL 2015

Incidentally, just 10 years ago Hewlett Packard employed a total of 58,000 people in the entire US.

So why is the company axing 58 thousand workers? Simple: so it can cut enough costs on top and continue to fund its now exponential surge in stock buybacks, which in the just concluded quarter was a record $1.6 billion, an increase of 178% from a year ago, and 66% more than the company spent on CapEx, in the process making its shareholders even richer while its management team get massive equity-linked bonuses.

Rinse. Repeat.