HP records $8.9bn loss as job cuts continue

Another 7,500 staff set to go in this fiscal year

HP has recorded an $8.9bn (£5.6bn) loss in its Q3 as it continues with its mass staff cull, aiming to have axed a total of 11,500 jobs by the end of its fiscal 2012.

The vendor giant's revenue dropped by five per cent year on year from $31.2bn to $29.7bn in the three months ending 31 July, but it insisted it was "making decent progress despite the headwinds".

Its Personal Systems Group disappointed, with net revenue in notebooks and desktops decreasing 10 and nine per cent respectively compared with 2011's Q3, while the total net revenue for the same period in services grew by just one per cent.

HP chief executive Meg Whitman believes the right actions were taken despite the loss.

She said: "During the quarter we took important steps to focus on strategic priorities, manage costs, drive needed organisational change and improve the balance sheet. We continue to deliver on what we say we will do."

The vendor announced its plan to cut its workforce by eight per cent in May, and HP's chief financial officer Cathie Lesjak said in an interview with Reuters that following the 4,000 job cuts in its Q3, another 7,500 will be set to go in the next quarter.

The 2011 £12bn acquisition of software company Autonomy contributed to a year-on-year software revenue growth of 18 per cent.

However, Victor Basta, managing director of consultancy Magister Advisors, branded the Autonomy acquisition a "disaster."

"HP has started pursuing a "buy software to get out of hardware" strategy but it is failing to keep pace with its competitors," he said.

"Autonomy was a pure software licence business, around which HP could have built a much larger solutions business. But within literally a few months it is effectively a write-off."