HP to ditch 3000 positions

HP to ditch 3000 positions

Computer maker Hewlett-Packard (HP) warned investors that it expects to report a revenue decline of 2-4 per cent and earnings between 13 and 17 US cents per share for its second fiscal quarter ending this month.

The company will eliminate up to 3000 management positions as a result of the earnings shortfall, and will require employees to take incremental days off, according to the statement.

HP's revised earnings estimate includes a one-time, $US150 million charge for writing down the value of unsold consumer computer equipment.

A survey of 16 financial analysts by First Call/Thomson Financial drew a consensus estimate for HP's earnings of 35 cents per share, an estimate that included the $150 million write down, said a First Call spokesman.

HP attributes the financial shortcomings "primarily to rapid deterioration in consumer information technology spending around the world," according to the statement. HP also expected currency values relative to Europe to change more in their favour during the quarter, but the dollar did not weaken as expected. HP cited a 4 per cent adverse currency effect.

"When we issued our previous second fiscal quarter guidance, we had limited visibility into the extent of the US consumer and commercial downturn, its potential impact on other regions and the continuation of adverse currency effects," said Carly Fiorina, HP's chairwoman, president and chief executive officer in the statement. "At this time, it is quite clear that the US downturn in the consumer market is now spreading to other regions, notably Europe."

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