Hewlett-Packard Australia today refused to rule out additional job losses following the US headquarters' announcement overnight that staff cutbacks planned in the merger with Compaq would rise by 1,800 from the 15,000 originally planned.
An HP Australia spokesperson said he "couldn't comment on the local implications" of the announcement, in which the company said "due to a continued market slowdown and HP's clear intent to have a competitive world-class cost structure, HP has increased its total number of planned headcount reductions to 16,800 by fiscal year 2003".
The announcement creates further uncertainty for the already pared-down workforce in Australia, who have been informed of the new figure by e-mail within the past few days. HP has already acted on initial plans to shave up to 600 people, or 15 per cent, of its 4,000-strong local workforce.
An HP spokesperson in the US said the 16,800 goal was for the end of the fiscal year, which would be October 31, 2003.
The new total means HP will trim more than 11 percent of the 150,000 jobs that existed when it acquired Compaq in May. That deal was predicated on improving profits by trimming costs.
However, HP says it is hiring in its profitable services and printing divisions. The personal computer and high-end computing divisions currently are money-losing.
Speculation that HP would announce new job cuts has been widespread, given the slow economy and the size of a recent loss in its high-end computing division.
The company said in a statement that market dynamics had changed since the merger was concluded in May, "in particular, the slowdown in enterprise IT (information technology) spending which is persisting six to 18 months longer than previously estimated by most economists."
HP plans on cutting 10,000 jobs by October 31, 2002 and had cut some 6,500 by late August.
