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Restructuring Charges
 6 Months Ended
Apr. 30, 2014
Restructuring Charges  
Restructuring Charges

 

Note 6: Restructuring Charges

  • Summary of Restructuring Plans

        HP's restructuring activities summarized by plan were as follows:

 
    
    
   Six months ended April 30, 2014
    
    
    
  
 
    
   Three
months
ended
April 30,
2014
Charges		    
   As of April 30, 2014  
 
   Balance,
October 31,
2013		   Charges   Cash
Payments		   Other
Adjustments
and Non-Cash
Settlements		   Balance,
April 30,
2014		   Total
Costs
Incurred
to Date		   Total
Expected
Costs to Be
Incurred		  

Fiscal 2012 Plan

                                                  

Severance and EER

   $ 945   $ 196   $ 255   $ (580 ) $ 8   $ 628   $ 3,291   $ 3,500  

Infrastructure and other

     40     53     109     (76 )   1     74     356     500  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total 2012 Plan

     985     249     364     (656 )   9     702     3,647     4,000  

Other Plans:

                                                  

Severance

     10     —     —     (2 )   —     8     2,629     2,629  

Infrastructure

     122     3     2     (24 )   1     101     1,441     1,443  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total Other Plans

     132     3     2     (26 )   1     109     4,070     4,072  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total restructuring plans

   $ 1,117   $ 252   $ 366   $ (682 ) $ 10   $ 811   $ 7,717   $ 8,072  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                                   

        At April 30, 2014 and October 31, 2013, HP included the short-term portion of the restructuring liability of $572 million and $901 million, respectively, in Accrued restructuring, and the long-term portion of $239 million and $216 million, respectively, in Other liabilities in the accompanying Consolidated Condensed Balance Sheets. The timing of associated cash payments is dependent upon the type of restructuring charge and can extend over a multi-year period.

  • Fiscal 2012 Restructuring Plan

        On May 23, 2012, HP adopted a multi-year restructuring plan (the "2012 Plan") designed to simplify business processes, accelerate innovation and deliver better results for customers, employees and stockholders. As of April 30, 2014, HP estimated that it will eliminate approximately 34,000 positions in connection with the 2012 Plan through fiscal 2014, with a portion of those employees exiting the company as part of voluntary enhanced early retirement ("EER") programs in the United States and in certain other countries. As of April 30, 2014, HP estimated that it would recognize approximately $4.0 billion in aggregate charges in connection with the 2012 Plan. HP expected to record these charges through the end of HP's fiscal 2014 as the accounting recognition criteria are met. HP expects to incur approximately $3.5 billion related to workforce reductions, including the EER programs, and approximately $500 million related to infrastructure, including data center and real estate consolidation, and other items. As of April 30, 2014, HP had eliminated approximately 31,400 positions for which a severance payment has been or will be made as part of the 2012 Plan. The severance- and infrastructure-related cash payments associated with the 2012 Plan are expected to be paid out through fiscal 2021.

        On May 22, 2014, HP announced that the previously estimated number of eliminated positions under the 2012 Plan is expected to increase by between 11,000 and 16,000 as HP continues to optimize the workforce and reengineer HP's business processes to be more competitive and meet its objectives. HP estimates it will recognize an additional charge of approximately $500 million based on the low-end of the estimated headcount increase and as the accounting recognition criteria are met. HP expects the related cash flow impact to be approximately $200 million through the end of fiscal 2014, and approximately $300 million thereafter.

        HP expects a total of 41,000 positions to be eliminated by the end of fiscal 2014, with the remainder to be eliminated in fiscal 2015.

  • Other Plans

        Restructuring plans initiated by HP in fiscal 2008 and 2010 were substantially completed as of April 30, 2014. Severance- and infrastructure-related cash payments associated with the other plans are expected to be paid out through fiscal 2019.