HP spinoff to cut up to 30K jobs

HP to cut 25k-30k jobs

In order to achieve savings, Hewlett Packard Enterprise expects 25,000 to 30,000 people to leave the company, HP said in a Tuesday press release.

The company said these vacated roles—about 10 percent of the workforce for the new corporation—will come mostly from the organization's Enterprise Services (ES) transformation.

"These restructuring activities will enable a more competitive, sustainable cost structure for the new Hewlett Packard Enterprise," Meg Whitman, HP's current chairman, president and CEO, said in a press release. "We've done a significant amount of work over the past few years to take costs out and simplify processes and these final actions will eliminate the need for any future corporate restructuring."

These are new, previously unannounced cuts, that the company expects will save about $2.7 billion. The latest cuts are on top of layoffs of 55,000 workers previously announced under Whitman.

HP is splitting into two listed companies—HP Enterprise and HP Inc.—later this year, separating its computer and printer businesses from its faster-growing corporate hardware and services operations.

HP said it is moving more of its workers to lower-cost locations as part of its efforts to cut costs. In its 2013 fiscal year, the company said 36 percent of the employees in the unit of HPE called enterprise services worked in what it called low-cost locations. This year 42 percent do, and executives said they plan to increase that percentage to 60 percent by 2018.

In its fiscal third quarter ended July 31, HP's revenue from personal computer and printer businesses, its largest, fell 11.5 percent.

Of the units to be housed in HPE, which will be run by Whitman, sales in enterprise services dropped 11 percent, while revenue at the enterprise group rose 2 percent.

HPE will have revenue of more than $50 billion, and is expected to report adjusted profit of $1.85 to $1.95 per share in 2016, HP said on Tuesday.

The business is expected to report free cash flow of $2.0 billion to $2.2 billion in 2016, at least half of which is expected to be returned through dividends and share buybacks.

—CNBC's David Faber and Reuters contributed to this report.