– This Is Why Hewlett-Packard Is Firing 58,000 (ZeroHedge, Feb 24, 2015):
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.
It only enriches the shareholders smart enough to get out in time. When the stock goes south, so goes the stock. This is one of the biggest buybacks in history, except for Apple……………..and it is being done with borrowed money.
It totally screws the shareholders when it tumbles, so it does all it can to accelerate greed before the fall.
If there is no product left, no new development, no new jobs, that means they have eaten their seed corn, and are now doing it all on the arm.
Sound very dangerous. I would not invest in that. Who would… The only way that works is if you are the first one out the door when the house of cards start to fall. Even then you will be holding cash that will be worthless. No body wants to wake up from the dream and see the nightmare.