7/31/2019 HEWLETT-PACKARD Second Quarter 2012 Results

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PALO ALTO, CA(Marketwire May 23, 2012) HP (NYSE: HPQ) today outlined plans fyear productivity initiative designed to simplify business processes, advance innovation and deliver better results for customers, employees and shareholders.

The restructuring is expected to generate annualized savings in the range of $3.0 to $3.5 billion exiting fiscal year 2014, of which the majority will be reinvested back into the company. Enabling investments in people, processes and technology will allow HP to accomplish the restructuring effort and to generate the savings. These moves are expected to yield significant improvements in efficiencyand customer service during the next several years. HP expects to use the savings to boost investment in innovation around its three areas of strategic focus: cloud, big data and security, as well as in other segments that offer attractivegrowth potential.

As part of the restructuring, HP expects approximately 27,000 employees to exitthe company, or 8.0% of its workforce as of Oct. 31, 2011, by the end of fiscalyear 2014. The company is offering an early retirement program, so the total number of employees affected will be impacted by the number of employees that participate in the early retirement plan. Workforce reduction plans will vary by country, based on local legal requirements and consultation with works councils andemployee representatives, as appropriate.

In addition to these restructuring actions, HP expects to achieve additional savings from non-headcount cost reductions, including supply chain optimization, SK

U and platform rationalization, go-to-market strategy simplification and business process improvement.

These initiatives build upon our recent organizational realignment, and will further streamline our operations, improve our processes, and remove complexity from our business, said Meg Whitman, HP president and chief executive officer. While sothese actions are difficult because they involve the loss of jobs, they are necessary to improve execution and to fund the long term health of the company. Weare setting HP on a path to extend our global leadership and deliver the greatest value to customers and shareholders.

HP expects to reinvest savings in each of its business segments to strengthen their ability to stay ahead of customer expectations and capitalize on growing mar

ket trends.HP will invest in research and development to drive innovation and differentiation across its core printing and personal systems businesses, as well as emergingareas. It will also invest in marketing, sales productivity and tools that simplify the customer experience and make it easier to do business with HP.Services will invest in accelerating service capabilities in the high client value areas of cloud, security and information analytics by enhancing HP intellectual property. Services will also strengthen its industry orientation and continueto differentiate its service offerings through quality and innovation deliveredto clients. Combined, these activities are expected to shift the portfolio to amore profitable mix of higher-growth services. Additional work in lean processmethodologies is expected to better serve clients and increase overall efficiencies.

Software will invest to speed development in the areas of security, big data andthe management of application lifecycle and infrastructure solutions, both on premise and in the cloud. It will also further leverage the capabilities of Autonomy and Vertica across the entire HP portfolio.Enterprise Servers, Storage and Networking will invest to accelerate its research and development activities to extend its leading portfolio of servers, storageand networking. Together these assets create a Converged Infrastructure which is the foundation for top client initiatives such as cloud, virtualization, big data analytics, legacy modernization and social media.