Remember when Hewlett-Packard announced it would fire 58,000 in February [4]just so the company could spend even more billions on stock buybacks to make its shareholders filthier rich?
[5]
Alas, since then things have gone south not only for HPQ stock but also for the company's buybacks activity...
[6]
... and so Meg Whitman clearly needed to spend even more on buybacks. But where to get the money? Wait, here's an idea: lets fire another 30,000!
Sure enough, just out from Bloomberg:
- HPE CFO SEES 2.7BN RESTRUCTURING LEADING TO 25K-30K JOB CUTS
- HP: BY 2018 40% OF ES EMPLOYEES WILL BE IN HIGH-COST LOCATIONS
More details from Bloomberg on the latest restructuring bloodbath out of Hewlett-Packard :
- sees FY16 FCF $2b-$2.2b, with normalized FCF $3.7b.
- Sees FY16 adj. EPS $1.85-$1.95
- Sees FY16 operating cash flow $5b-$5.2b
- Sees cutting 25k-30k jobs as part of restructuring, with GAAP charges $2.7b
- Sees returning at least 50% of FCF to holders through ~$400m in dividends and the remaining in share repurchases
- Says will consider strategic partnerships, investments and M&A “in the right circumstances”
- Earlier, co. said sees HPE cloud rev. ~$3b in FY2015 growing over 20% with similar pace expected over next “several years”
- Said enterprise services business on target for 7%-9% oper. margin target and for reducing $1.4b in costs for 2015; sees similar cost reduction pace continuing next year
And so, dear 30,000 formerly-well paid computer engineers and technicians: welcome to the fast-food recovery. And don't forget to BTFD with all that spare cash.
Now, where is that 25bps rate hike because the economy is just too strong...
