HP said the cost savings will be re-invested in growing the business, including spending on R&D; investments in marketing, sales productivity and tools that simplify the customer experience; accelerating cloud services capabilities through a focus on industries and intellectual property; and further integration of the Autonomy and Vertica products across the HP portfolio.
The restructuring will result in a one-time charge of USD 1.2 billion this fiscal year and additional charges of USD 1.8 billion pretax through fiscal 2014. The announcement came alongside HP's results for the fiscal second quarter to 30 April. In the period, revenues fell 3 percent year-on-year to USD 30.7 billion, and EPS dropped 24 percent to USD 0.80, down less than expected.
It also announced that chief strategy officer Bill Veghte will take over as head of Autonomy, and Autonomy founder Mike Lynch will leave HP after a transition period.
For fiscal Q3, HP said it will take a charge of up to USD 1.2 billion to write down the value of the Compaq brand. As a result of the charges, EPS is estimated at breakeven to 3 cents in Q1. EPS for the full year fiscal 2012 is now estimated at USD 2.25-2.30.
