I came across an article this morning that indicated, according to reports published Thursday, computer giant Hewlett-Packard (HP) could cut as many as 30,000 jobs to compensate for dwindling demand for personal computers as more people are using smartphones and tablets to access the internet.
The first thing that entered my mind was how the advancement of technology is both a blessing to some (smart phone and tablet manufacturers) and a curse to others, like HP, who is taking a major financial hit, and their employees that will most likely lose their jobs.
For example, over the years HP has made hundreds and hundreds of billions of dollars in the computer industry.
Now, analysts predict HP’s revenue for its current fiscal year ending in October will total $122 billion, down 4 percent from $127 billion last year.
Companies like HP are losing billions in revenue and are scrambling to come up with the latest and greatest technology to increase revenue. To make up for lost revenue, in this instance, 30,000 people stand to lose their jobs.
Although, when taking into consideration that HP earns $120+ billion dollars annually, a $5 billion annual loss in revenue might not seem like much in the in larger scheme of things; but the devastating impact that the employees that lose their jobs must endure is sometimes disastrous.
For example, if HP trims its payroll by at least 18,000 workers, according to ISI Group analyst Brian Marshall, the company could save more than $1 billion annually. On average, that means HP had $55,555.56 dollars vested in to each employee annually ($1 billion divided by 18,000 employees = $55,555.56).
I’m sure some employees make more, some less, but on average, that’s a very nice annual salary and I’m guessing that it will be very difficult for those employees to find jobs in this economy that will offer them the same or similar pay and benefits.
When employees lose their jobs, most are forced to file for unemployment insurance benefits. According to the Center on Budget and Policy Priorities in Washington, D.C., the average U.S. unemployment insurance benefit is $330 per week.
Imagine if your earnings went from $55,000 annually, which equates to $1057.70 per week, to $330 per week. Having bills and living a lifestyle commensurate with $1057.70 per week and now you have to try and pay those same bills, and feed your family, on $330 per week. Yikes!
To complicate matters more, unless dire economic conditions demand extensions, most states provide a maximum of 26 weeks of benefits. Chances are that you may suffer a significant financial loss. Not to mention the stress and emotions that it creates as a result. It forces many people into bankruptcy, or worse.
So, is advancing technology both a curse and a blessing? I’d say so.
I’d love to hear your thoughts and examples of how advancing technology can be a blessing to some and a curse to others.
Here’s to a thriving manufacturing industry that is in need of skilled workers to accommodate it’s growth. Another blessing and curse. But that’s a story I’ve already mentioned in previous blog posts.
If you missed the link above to the HP article, you can read it here.
– Troy Martz