HP to slash 24,600 jobs following EDS buy
The job cuts, which amount to 7.5 percent of the company's workforce, will come over the next three years. The restructuring program is expected to save it $1.8 billion annually.
Hewlett-Packard on Monday announced plans to cut tens of thousands of jobs over the next three years as it digests its recent purchase of EDS.
The company expects to replace roughly half of these positions over the next three years to create a global workforce that has the right blend of service delivery capabilities to address the diversity of its markets and customers worldwide.
HP announced plans in May to acquire the computer services firm for $13.9 billion. The deal closed in August. The company said that, once it has finished with the cuts, it expects the moves to save $1.8 billion in costs annually. It said it does plan to reinvest in other areas.
On the accounting side, HP said it will record a $1.7 billion charge in the fourth quarter of fiscal 2008 related to the restructuring program. The company said that, of that charge, $1.4 billion will be recorded as goodwill, and $300 million will be recorded as a restructuring charge that will be included in its financial results.
The company positioned the announcement as part of an effort to "streamline" its costs. It plans to discuss the move at an analysts' meeting, set to kick off shortly.
"HP now has the broadest technology capabilities in the market to meet customer needs today and in the future," CEO Mark Hurd said in a statement. "HP has a strong track record of making acquisitions and integrating them to capture leading market positions. We will deliver on the promise of HP and EDS for our customers and shareholders." HP discussed the job cuts as part of a meeting under way for financial analysts.