UPDATED 15:25 EDT / MAY 28 2012

6 Worst Layoffs in Tech – Past 12 Months

HP, the world’s largest manufacturer of computers, decided to layoff about 27,000 employees before the end of the 2014 business year.

The cuts, announced last week, represent the largest layoffs in HP’s working history.  The company hopes to avoid layoffs as much as possible offering early retirement packages.

As part of the restructuring plans of several years, HP expects that approximately 27,000, or about eight percent of HP’s total employees, will be leaving the company by the end of fiscal year 2014.  The largest technology company in the US, HP currently employs 349,600 people worldwide.

This neatly illustrates a long-term strategy by HP to boost its R&D spending, concentrate on innovative product quality, and bring the focus back on to cloud computing and software services.

HP’s revenues were violated by the growing adoption of smartphones, tablets and other devices for consumers, generating lower sales of personal computers.  PC sales of the company fell 15 percent during the holiday season.

“At the end of 2009 we reported a workforce of about 304,000. At the end of 2010 we had almost 325,000 employees, and at the end of 2011 that number had ballooned to nearly 350,000. Over that same period we saw year-over-year revenue growth of 10% in 2010, of 1% in 2011, and, so far in 2012, revenues have been declining,” said Meg Whitman, CEO, HP.

“We’re struggling under our own weight. And we’ve got to restore a healthy balance in order to return HP to its position as a growing‚ thriving‚ innovating industry leader. That’s what this is all about. And the workforce reduction is only one piece of a comprehensive effort. We see a lot of opportunity to remove complexity, streamline and reduce costs in a number of areas across HP.”

Meanwhile, HP’s utilities are also failing, and its once golden printing business has stagnated over the last decade. The printer business especially has collapsed in recent years – last year was the worst, as this division fell by over 10 percent.

The reduction in workforce may be an attempt to align supply with demand. And HP is not the first tech company (and won’t be last either) that took a massive restructuring approach to its workforce when facing economic uncertainty.

Here are some other instances in the IT industry where employees faced the brunt for their employer’s adversities.

Cisco: 6,500 Layoffs

In the process of streamlining business operations and refocusing on their core businesses such as data centers, switching and routing, Cisco officially announced the 6,500 layoffs along with shutting down their set-top box plant in Juarez, Mexico to Foxconn International Holdings Ltd last year.

The layoffs turned out to be one of the highest numbers for the network giant for the entire year.

Nokia- Siemens: 17,000 Layoffs

When Nokia tied up with Siemens in 2006, the outlook was to focus on the development of network and mobile business and make the joint venture a top brand in network infrastructure and mobility.  However, after facing stiff competition from network infrastructure providers, the joint venture loss of about $380 million in 2011 and plan to reduce its 74,000 strong workforce by 17,000 people.

The layoff process was part of refocusing on mobile broadband equipment, the fastest growing segment of the market. This reduction will help the company trim annual operating expenses by $1.35 billion by the end of 2013.

Sony: 10,000 Layoffs

After a projected loss of $6.4 billion last year and the sinking television manufacturing division that has seen losses for eight years, Sony said that the company would cut down its workforce by 10,000 over two years.

Sony hopes to see an operating profit after the restructuring plans of 2008, when the company posted a profit of $3.84 billion.

Yahoo: 2,000 Jobs Layoffs

Yahoo has undergone rounds of layoffs in its global services unit in recent years.  Most recently, the online internet leader last month confirmed that 2,000 employees or nearly 15 percent of its workforce will be laid off later this year. The employee numbers will then drop from 14,000 to an estimated 12,000 worldwide.

The plan, as part of Yahoo’s long term evolution, will result in $375 million in annual savings.

RIM: 2,000 Layoffs

The shrinking smartphone manufacturer cut 2,000 people in 2011 in an effort to refocus on areas that offer high growth opportunities.

Pioneering smartphone industry with its BlackBerry device, RIM has seen its market share dwindle in the face of Android smartphones and iPhones in recent years.

Some of the latest published media reports suggest the company will further cut between 2,000-6,000 jobs in the coming weeks.


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