HP 2006 Annual Report Download - page 104
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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 8: Restructuring Charges (Continued)
12,000 employees. Pursuant to the plan, approximately 9,500 positions were eliminated during fiscal
2006, bringing the total to 14,200 as of October 31, 2006. The majority of the remaining 1,000 positions
are expected to be eliminated during fiscal 2007. HP expects to pay out the majority of the remaining
costs relating to severance and other employee benefits before the end of fiscal 2007.
In the third quarter of fiscal 2005, HP’s management approved a restructuring plan and HP
recorded restructuring charges of $109 million related to severance and related costs associated with
the termination of approximately 1,450 employees, all of whom left HP as of October 31, 2005. Of the
initial restructuring amount, HP has paid substantially all of it as of October 31, 2006.
Fiscal 2005 Workforce Rebalancing
In addition to the restructuring activities described above, HP incurred approximately $236 million
for the six months ended April 30, 2005 in workforce rebalancing charges within certain business
segments, primarily for severance and related costs. As a result of these workforce rebalancing actions,
approximately 3,000 employees left HP as of October 31, 2005. Of the initial restructuring amount, HP
has paid substantially all of it as of October 31, 2006.
Fiscal 2003 Restructuring Plans
During fiscal 2006, HP recorded adjustments of $4 million in additional restructuring charges. Of
the initial restructuring amount of $752 million, HP has paid substantially all of it as of October 31,
2006.
Fiscal 2002 and 2001 Restructuring Plans
The 2002 and 2001 restructuring plans are substantially complete, although HP records minor
revisions to previous estimates as necessary. During fiscal 2006, HP recorded additional adjustments of
$48 million. These charges pertained to facility lease obligations and severance. In addition, an
adjustment during fiscal 2006 includes a $25 million reduction of goodwill pertaining to severance and
other related restructuring true-ups. The aggregate $103 million restructuring liability with respect to
these plans as of October 31, 2006 relates primarily to facility lease obligations and severance. HP
expects to pay out these obligations over the life of the related obligations, which extend to the end of
fiscal 2010.
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