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.