by Susan Eustis

Hewlett-Packard (NYSE:HPQ) disclosed that it plans to slash 27,000 jobs, 8 percent of its work force. It will cut 9,000 positions in fiscal 2012 with the balance by fiscal 2014.  HP s restructuring is positioned to save the company $3.0 billion to $3.5 billion by the end of fiscal 2014.

At the end of 2009, HP workforce was 304,000.  At the end of 2010, it was 325,000 employees.  At the end 2011, that number was 350,000.  Over that same period, year-over-year revenue growth was 10 percent in 2010, 1 percent in 2011… and so far in 2012, revenues have been declining.

HP and its partners are being hammered by margin pressure.  HP publicly announced a layoff plan that is a response to the fact that HP is in trouble.  HP performance is challenged.   The company needs to consistently deliver on what they say  they can do.   Whitman confirmed HP’s commitment to infrastructure, PCs and printing, servers, storage and networking.  She seeks to position these divisions with differentiating strength.

HP’s employee count is not sustainable by its low revenue.  The aim is to restore a healthy balance in order to return HP to its position as a growing, innovative enterprise.  Innovation is key.  Workforce reduction is one piece of a comprehensive effor to restore the company to a position of growth.   The aim is to remove complexity, streamline and reduce costs in a number of areas across HP.

HP strategic business pillars are cloud, security and information optimization.  Investments aim to help the company stay ahead of customer expectations and market trends.  The HP consumer-focused PC and Printing Group is focused on design, engineering, quality, and generating demand.