Hewlett-Packard (HPQ) warned that business is tough and that the company is watching every penny. CEO Leo Apotheker urged his top executives to “watch every penny and minimize all hiring.”

Apotheker, wrote that the company’s existing headcount plans are “unaffordable given the pressures on our business”.

Apotheker wrote, Tracy Keogh, executive vice president of human resources, is “driving a full headcount re- planning process” aimed at reflecting “the new realities of the market and our position”, suggesting that job cuts are are coming.

Hewlett-Packard is the largest maker of PCs and consumer and business shift towards tablet computing devices like Apples iPad is hurting HP.

HP is trying to lessen its dependence of PCs by going after high margin cloud computing services businesses including servers, storage computers and software.

The company is starting a cloud-computing service that will let developers create applications for consumers and businesses that run on HP servers, said Apotheker.