Hewlett-Packard will embed its marketing and sales efforts directly into its business units as part of a restructuring plan that also calls for eliminating 14,500 positions, or 10% of the company’s work force.
The downsizing, which will be completed over the next six quarters, also includes the elimination of HP’s Customer Solutions Group unit, a stand-alone unit that sells to businesses and the public sector.
The company said embedding sales and marketing efforts into the business units simplifies HP’s structure and provides a tighter link with customers.
The changes are designed to reduce costs and place a greater focus on the company’s customers, HP said yesterday. Beginning in fiscal 2007, HP expects annual savings of about $1.9 billion, including $1.6 billion in labor costs and $300 million in benefits savings. In fiscal 2006, HP expects savings of between $900 million and $1.05 billion.
The job cuts will largely be made in support functions, such as information technology, human resources and finance as well as inside business units. A voluntary retirement program will be offered to longer-serving staff in the U.S.
The company also announced recent staff changes. Cathy Lyons was promoted to executive VP and CMO, a new position. She will oversee worldwide branding and marketing. She had been senior VP of HP’s Business and Imaging Printing unit, and has been with HP for 26 years. Michael J. Winkler, 60 will retire as executive VP of CSG following its dissolution.
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