This Is Why Hewlett Packard Just Announced Another 16,000 Job Cuts

Tyler Durden's picture




 

The biggest scandal in today's release of Hewlett Packard Q2 earnings was not that it hit 30 minutes prematurely, catching algos unaware and unable to BTFD when the stock tumbled on what was a revenue miss and 1% decline from last year, nor that the company guided below estimate, pushing its stock some 3% lower in the last minutes of trading.

The biggest scandal was this disclosure in the second quarter results press release: "As HP continues to reengineer the workforce to be more competitive and meet its objectives, the previously estimated number of eliminated positions will increase by between 11,000 to 16,000." This is in addition to the 34,000 layoffs already noted previously, meaning HP will fire a total of 50,000 in the near future.

Want to know why HPQ is forced to fire so many well-paying jobs it once again makes a mockery of anyone who claims there is some economic recovery going on?

The chart below, which compares the company's quarterly CapEx, declining (so no, not increasing as some clueless sellside analyst hacks claim) by 16% from last quarter and down 4.5% from a year ago to $840 million and thus leading to less growth opportunities for the company and resulting in tens of thousands of pink slips, and the soaring amount of stock buybacks, which rose by nearly 50% in Q2 from Q1 to $831 million and by 27,600% (!) from a year ago, the most since 2011, should provide all the answers.

So dear soon to be laid off Hewlett Packard employees, if you want to direct your anger somewhere, please direct it at the company's "activist" shareholders who have forced management to invest not in growth for the future, and thus you, but to reward its shareholders immediately, right now with what otherwise would have been your future salary.

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Thu, 05/22/2014 - 16:28 | 4786220 cougar_w
cougar_w's picture

Eating their seed corn. HP is gone.

Thu, 05/22/2014 - 16:50 | 4786315 duo
duo's picture

Who is gong to buy a printer or computer these days?  A small business?  Good luck with that.

Thu, 05/22/2014 - 16:58 | 4786336 john39
john39's picture

i traded a 12 pack of beer to my accountant neighbor for a HP printer last week... and was shocked to realize that i had to buy color ink, with a black ink cartridge, just to print black and white documents...  wtf?  but it gets better...  also the half empty black cartridge had a chip in it with an expiration date... which is of course past.  so just to get thing to work, i need to spend almost $100 for 4 cartridges of ink...    not hard to see why this company might be having issues.

btw, did go on line and figured out how to buy ink refills and defeat the expiration date... but still, most are not going to go through that trouble.

Thu, 05/22/2014 - 17:01 | 4786345 Rainman
Rainman's picture

go get your beer back.

Thu, 05/22/2014 - 17:02 | 4786348 john39
john39's picture

bastard drank it staight away. 

Thu, 05/22/2014 - 17:16 | 4786399 COSMOS
COSMOS's picture

Lol I guesss you can have him pee in the snow what you want printed and then take a picture of it and send it as your document.  With that much beer I am sure he is good for a few snow coverd fields worth of Piss Printing.

Thu, 05/22/2014 - 17:17 | 4786407 cougar_w
cougar_w's picture

It was a good prank though. You'll just have to get over the fact that he profited from that bit of information asymmetry.

Thu, 05/22/2014 - 17:35 | 4786475 Handful of Dust
Handful of Dust's picture

The Peeples need to be "Repurposed."

 

Dats all.

Thu, 05/22/2014 - 18:43 | 4786736 wee-weed up
wee-weed up's picture

Cue Obozo saying "And I'm mad as hell about it!" in 3... 2... 1...

Hope & Change! O-ba-ma...  O-ba-ma...  O-ba-ma...

Thu, 05/22/2014 - 18:51 | 4786768 Handful of Dust
Handful of Dust's picture

"Small business," someone above said?  Forget that.  Of the three 'small businesses' I know the owners of,  two went under this year due to postal rate increases, internet sales tax and higher health insurance costs.

I don't see much of a demand for this stuff anymore.

Thu, 05/22/2014 - 17:14 | 4786389 COSMOS
COSMOS's picture

Look online you can buy replacement ink you inject into the cartridges, walmart has it also. And most printers you can overide the empty cartridge setting by holding on to one of the keys for a few secs, go online and do some searching.

I have a cannon, bout a bunch of refill ink for eight dollars, been using it for two years no problem, and I can overide the empty ink cartridge deal after i refill it by holding on one of the keys.  Works great for me.

Thu, 05/22/2014 - 17:30 | 4786456 Roger Knights
Roger Knights's picture

What keys?--and on the printer or the computer? TIA.

Thu, 05/22/2014 - 17:43 | 4786502 ebworthen
ebworthen's picture

Laser printer is the way to go, toner cartridge is $72 and lasts 2,500 pages instead of 250.

Thu, 05/22/2014 - 18:16 | 4786637 Bunga Bunga
Bunga Bunga's picture

Toner refill for $26.

Thu, 05/22/2014 - 18:44 | 4786745 duo
duo's picture

 Oh, and the software default to photo quality every time you hit print.  You have to go through a menu tree to get to draft or another non ink-wasting quality.  I did that for a year, bought a Canon, and never looked back.

Fuck HP.

Thu, 05/22/2014 - 22:57 | 4787306 StychoKiller
StychoKiller's picture

I still own a working 24-pin Citizen dot-matrix printer (GSX-130).  They're still used whenever you gotta print out a form with multiple copies, so printer ribbons are also still available, runing around $8/ribbon.

Thu, 05/22/2014 - 16:58 | 4786337 Fish Gone Bad
Fish Gone Bad's picture

I heard that National Public Radio is laying off a bunch of people too.  I guess all that cheerleading was for nothing...

Thu, 05/22/2014 - 20:39 | 4787016 knukles
knukles's picture

All the liberals gone over to Fox ....
(snark)

Thu, 05/22/2014 - 20:31 | 4786999 Miffed Microbio...
Miffed Microbiologist's picture

Well, I noticed there are no longer any Oscilloscopes at Office Depot anymore either.

Miffed;-)

Thu, 05/22/2014 - 20:39 | 4787009 knukles
knukles's picture

Yeah, but at my local Rite-Aide they now have about a dozen different dildos on sale at the prescription counter*.
Bread and Circuses, Daaahling

 

* With them funny plastic security caps on them the cashier has to remove, like on booze bottles.... "Hey Maude, let's take some-a these funnies and a bottle to the little boy's room before we git our groceries, huh?"

Thu, 05/22/2014 - 23:30 | 4787375 MeelionDollerBogus
MeelionDollerBogus's picture

nothing wrong with sexual entertainment. Think of how dealing with those women will be if they're constantly aggravated at not getting it.

Thu, 05/22/2014 - 23:56 | 4787429 Miffed Microbio...
Miffed Microbiologist's picture

Well, you may be right but personally, as in all things, I prefer the real deal to second best fakery. ;-)

Miffed;-)

Fri, 05/23/2014 - 07:16 | 4787823 MeelionDollerBogus
MeelionDollerBogus's picture

I would hope so or that eliminates a heck of a lot of our purpose on this side of the gender divide!

Then again... from personal experience I can say one doesn't necessarily exclude the other. That can get interesting. You ever seen a pic of one of those crazy sybian things? It's like a damned engine. Shake a house. Not a hand-held appliance if you know what I mean.

Thu, 05/22/2014 - 17:23 | 4786427 mt paul
mt paul's picture

GMO

seed corn..?

Thu, 05/22/2014 - 16:29 | 4786224 NoWayJose
NoWayJose's picture

I didn't think HP still had 16,000 jobs left in the US.

Thu, 05/22/2014 - 17:03 | 4786355 Fish Gone Bad
Fish Gone Bad's picture

My last printer was a Brother HL2240.  I bought it for $50 on sale at Staples.  You can buy refill kits for it for cheap.  I will NEVER need to buy another printer, any time soon.

FGB

Thu, 05/22/2014 - 17:17 | 4786409 COSMOS
COSMOS's picture

As long as they keep writing drivers for it for newer operating systems lol

Thu, 05/22/2014 - 17:15 | 4786393 Monty Burns
Monty Burns's picture

And you can be sure that the majority of the 16,000 are engineers, R&D staff etc. The untoucheed ones will be in sales and Diversity Management.

Thu, 05/22/2014 - 17:29 | 4786454 ebworthen
ebworthen's picture

I'd bet they let go of a number of the engineers and R&D staff, most of whom will never, ever be hired by Google or Apple (they're over 35).

HP will replace them with E-1,2,3 Visa holders from India and China for 1/2 the cost and no benefits.

Thu, 05/22/2014 - 18:27 | 4786677 pitz
pitz's picture

Google and Apple mainly hire over-35 types.   But most of them, are, of course, toast because of all the H-1B holders glutting up the Silicon Valley and elsewhere.

Thu, 05/22/2014 - 19:26 | 4786852 Kirk2NCC1701
Kirk2NCC1701's picture

Whaddya mean "will" replace?  Have you walked around their Cupertino or Palo Alto campuses lately?

They replaced most American-born staff with these visa holders > 10 years.  Even back then the white guys were < 40% of the staff.

I'm all for giving people and "minorities" and opportunity.  But given China's and India's populations, exactly WHO is the "minority"?  Dumbass liberal HR assholes!

Thu, 05/22/2014 - 20:42 | 4787025 knukles
knukles's picture

Yeah, well, white Anglo-Saxon, Christian, English speaking males are now one of the smallest minorities in Kalifornia and you think any "diversity" laws being enforced... Oh Fuck Me No!

Thu, 05/22/2014 - 16:29 | 4786228 LawsofPhysics
LawsofPhysics's picture

Corporations putting dividends before people?  < shocker >

Thu, 05/22/2014 - 17:11 | 4786377 sessinpo
sessinpo's picture

 LawsofPhysics       Corporations putting dividends before people?  < shocker >

---

We had something like that. It's called unions. Then the unions became corrupted too.

What's even more of a shocker is that one would think corporations would put people before profit and dividends. And aren't those people receiving dividends people? Oh yea, this is a facist society. Corporations are there to provide jobs, not profit for the owners.

Thu, 05/22/2014 - 16:30 | 4786230 the not so migh...
the not so mighty maximiza's picture

fucken a, its a recovery

Thu, 05/22/2014 - 16:32 | 4786237 Muppet
Muppet's picture

Hewlett the dogs out!

Thu, 05/22/2014 - 16:42 | 4786290 0b1knob
0b1knob's picture

Numbers "accidently" (?) released by Meg Whitman during a conference call.

http://blogs.marketwatch.com/thetell/2014/05/22/h-p-fiscal-second-quarte...

 

Thu, 05/22/2014 - 17:26 | 4786442 mt paul
mt paul's picture

asset deflation dogs

Thu, 05/22/2014 - 16:35 | 4786238 rtalcott
rtalcott's picture

If you no longer actually manufacture....it's all contract...so no manufacturing CapEx....then what percentage would you expect to see...things like R&D (I thought) are Expense....

 

NOT saying that HP is not a POS company since Bill & Dave left...it is....but my question about CapEx is real.

Seems to me that HP is more like Broadcom than Intel.

Thu, 05/22/2014 - 16:51 | 4786316 GooseShtepping Moron
GooseShtepping Moron's picture

Software and services are no more free to develop than hardware is, so even if HP went that route it wouldn't eliminate capex. However, even assuming the premise implied in your question is correct, it should still manifest as a gentle downtrend in capax, not the worst drop in three quarters.

HP ought to know by now that nobody is buying its junk. Capex is the most important thing for them to spend money on if they want to remain viable over the long term, but they've already decided not to do that. The strip mining of the company has begun.

Another one bites the dust.

Thu, 05/22/2014 - 16:56 | 4786332 rtalcott
rtalcott's picture

I have to disagree...development is MUCH less capital intensive (in my experience)....high volume automated manufacturing is not cheap...but to your point I would have expected CapEx to have been relatively low for the last decade...so if it has taken a dive in the last few years like you I wonder why.

Thu, 05/22/2014 - 23:03 | 4787321 StychoKiller
StychoKiller's picture

Agilent actually produces all the measuring instruments that Hp is famous for.

Thu, 05/22/2014 - 16:33 | 4786241 debtor of last ...
debtor of last resort's picture

So the borrowing of the future chart is going hockeystick?

Thu, 05/22/2014 - 16:33 | 4786242 SheepDog-One
SheepDog-One's picture

HP is the worst ever! I got one of their laptops for Christmas and its total junk, inoperable.

Thu, 05/22/2014 - 17:20 | 4786421 COSMOS
COSMOS's picture

You know my family has bought over the years three of their desktops and four laptops and have been very pleased.  They all still run just upgraded for more computing power and newer CPUs.  I would buy an HP over a Dell or Acer anyday.

Thu, 05/22/2014 - 16:35 | 4786247 Winston Churchill
Winston Churchill's picture

Eating themselves alive.No ketchup.

Thu, 05/22/2014 - 16:34 | 4786249 Id fight Gandhi
Id fight Gandhi's picture

Remember the last ceo who got fired just after 11 months on the job got a 8 figure severance package. His idea was to divest the core hardware business to focus on software BS.

Meanwhile he had them buy a software company that had to be written off due to its fake valuation. People made billions on it yet nobody went to jail.

Thu, 05/22/2014 - 16:40 | 4786276 0b1knob
0b1knob's picture

...and then they hired Meg Whitman.  Goodbye frying pan, hello fire.

Thu, 05/22/2014 - 16:47 | 4786302 Rainman
Rainman's picture

+ 1 Fiorina

Thu, 05/22/2014 - 19:37 | 4786883 GoldRulesPaperDrools
GoldRulesPaperDrools's picture

I heard Carly didn't know squat about running the company but could suck a brick through a garden hose. ;)

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