RECENT POSTS
Wednesday, August 21, 2019
WeWork Liabilities, Part II

Tuesday, August 20, 2019
WeWork’s Liabilities in Perspective

Wednesday, August 14, 2019
Comparing LinkedIn, Twitter Revenue

Wednesday, August 7, 2019
Leasing’s Effect on Retail Balance Sheets

Thursday, August 1, 2019
Using Calcbench to Find China Exposure

Tuesday, July 30, 2019
Leasing Details: The Comcast Example

Monday, July 29, 2019
Easy Fundamental Equity Analysis in Python

Monday, July 22, 2019
Calcbench Data and Tax Reform Insight

Wednesday, July 17, 2019
Downshifting in the Trucking World

Tuesday, July 16, 2019
New Report: Adoption of New Lease Accounting Standard

Friday, July 5, 2019
More Consequences of Lease Accounting

Monday, July 1, 2019
Another Example of Tax Reform Twisting Bottom Line

Thursday, June 27, 2019
The Latest Share Repurchase Data

Tuesday, June 18, 2019
Popping the Lid on Smuckers’ Goodwill

Tuesday, June 11, 2019
Not Much Fizz in LaCroix Right Now

Wednesday, May 29, 2019
An Example of Calcbench, Excel, and Insight

Monday, May 20, 2019
Research Paper: Capex Spending

Thursday, May 16, 2019
Psst: Got Any Weed?

Wednesday, May 15, 2019
Open Letter: SEC Proposed Rule for BDCs

Friday, May 10, 2019
General Motors and Workhorse

Archive  |  Search:

There’s a certain glum symmetry to corporations announcing mergers, layoffs, consolidations, and other restructurings: they also have to disclose how much they expect those restructuring efforts to cost. So we here at Calcbench fired up our Normalized Metrics database to see what the cost of cutting costs has been lately.

Among the S&P 500, total restructuring charges for 2012 through 2015 totaled $84 billion, with an average of $42 million per year—although that average is heavily skewed both ways, with many companies listing no charges for the entire four years, while a handful in any given year might list $1 billion-plus in charges.

Restructuring charges did change from one year to the next, but generally the numbers fluctuated near the neighborhood of $20 billion in total; one can’t say the charges overall are moving up or down:

  • 2012: $22.66 billion
  • 2013: $18.47 billion
  • 2014: $20.39 billion
  • 2015: $22.49 billion

Which company took the largest restructuring charge in the last four years? The prize goes to HP Inc. (formerly known as Hewlett-Packard), which incurred $2.27 billion in charges in 2012. That charge was part of a larger three-year plan announced earlier in 2012 that resulted in 55,800 job cuts and $5.5 billion in total charges by the time the plan wrapped up in 2015. Of that $5.5 billion, $4.9 billion was related to workforce reductions, and another $589 million to infrastructure changes (disposing of real estate, equipment, and so forth).

At least, those were the numbers by the time the 2012 restructuring program ended—but how did that restructuring plan evolve over time?

We dug back deeper, to HP’s Form 10-K from 2012 when it first announced the restructuring. Back then, HP predicted 29,000 job cuts and $3.7 billion in charges to be completed by 2014. One year later, the plan numbers had risen to a projected 34,000 job cuts and $4.1 billion in charges.

The big jump came in HP’s 2014 annual report. That’s when the company raised the job cuts to an estimated 55,000, “as HP continues to optimize the workforce and re-engineer business processes to be more competitive and meet its objectives.” HP also raised its expected restructuring costs to $5.5 billion. Those were the final numbers confirmed in the 2015 annual report.

So ends the story of HP’s 2012 Restructuring Plan—but a sequel is in the works. In this year’s annual report HP has detailed the costs of a new three-year restructuring program that is part of its plan to cleave itself into two separate companies. HP’s new plan calls for a workforce reduction of 33,300 employees by 2018, at a cost of $2.9 billion from now through 2018. We’ll keep reading.


FREE Calcbench Premium
Two Week Trial

Research Financial & Accounting Data Like Never Before. More features and try our Excel add-in. Sign up now to try the Premium Suite.