With the Wall Street Journal predicting an announcement tomorrow, HP fell silent on the subject and executives cancelled previously planned meetings with the media as they waited for news of where the axe will fall.
Analysts came up with a variety of predictions, ranging from 5,000 to 25,000, for the extent of the reductions that are likely to center on the low-margin enterprise unit.
Hurd, who replaced Carly Fiorina as CEO in March, made his name at NCR by launching economies that are on track to deliver $250m of annualized cost savings by the end of this year and an additional $100m through 2006.
The potential for savings at HP are far larger, with a 15,000 workforce reduction likely to cut costs by $1.5bn a year. While handing out pink slips will save costs, the trick is to ensure that the effectiveness of the operation is not undermined by the reduction, a worry that obviously stayed the hand of Fiorina.
HP set a target for 17,000 job reductions when it merged with Compaq in 1992 and added a further 3,500 to this total the following year.
It is still stuck with a costly focus on channel sales, which has led it to lose market share to Dell Inc and its services operation cannot match the scale of that which has enabled IBM to buttress its operations.
While acknowledging that its margins in some areas were unacceptable, Hurd has given no indication of radical action, which as that taken by IBM when it merged wits PC business in the low-cost China-based Lenovo Group.
Normally, an announcement about job reductions was expected when HP announces its second quarter results next month. However, with the investment community seething with impatience for action, Hurd is expected to swing the axe this week.
