UPDATED 07:12 EDT / OCTOBER 13 2011

HP Layoff Rumors Grow as webOS Takes a Back Seat

Electronics giant Hewlett-Packard is now being led by the third CEO in two years, and the changes that analysts and company insiders predicted are now starting to realize, according to early reports.  HP reportedly sent out an email to the 500 staffers in its San Diego unit, presumably the group that was working on webOS, notifying them that they’ve been laid off. Those jobs have been moved HP R&D facilities in Shanghai and Yehud, Israel according to sources.

“It’s not much of a surprise, since following the untimely death of the TouchPad and webOS, it was really only a matter of time before the software groups directly responsible for maintaining those products would be eliminated.”

While this may be the case, company officials have not confirmed this news yet. Nevertheless, the layoffs and the timing tie in with earlier reports rather accurately

AppleInsider ran a story two days ago which claimed that a meeting was due earlier this week, during which the company would reveal plans to sell or spin of the unit. This was not the outcome, but it confirms the part about the webOS unit going through some sort of big change this week.

On top of that, AllThingsD reported back in mid-September that Hewlett-Packard is planning to lay off 525 employees, a figure that fits in with the latest report.

The most important factor that may validate the layoffs is that HP publicly announced plans to pull the plug on webOS during its most recent earnings call, and already shut down production of new devices. The company was even sued by shareholders who claimed HP mislead them about the popularity of the mobile OS.

Former CEO Leo Apotheker was the one who broke the news of the spinoff decision, which is set to be carried out under new head Meg Whiteman. She needs to focus on restoring a lot of investor confidence, and stopping the company’s acquisition spree is another route she has taken.


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