HP to Cut 24,600 Jobs Worldwide

Sept. 16, 2008
Cuts result of EDS acquisition

Hewlett-Packard (HP) said on Sept. 15 it will cut 24,600 jobs worldwide over the next three years as part of its integration with computer services firm Electronic Data Systems. HP bought EDS in August as part of a $13.9 billion deal that aimed to create a global powerhouse in computer services to compete against IBM.

About 7.5% of the combined workforce of 320,000 employees will be affected, with about half of the cuts taking place in the U.S. Layoffs will be weighed toward EDS, which reported having 142,000 employees as of August. HP said it is eliminating "redundant" positions in departments such as accounting, human resources, and legal, and plans to actually hire about 12,000 engineers in the coming three years.

The workforce reduction aims to "streamline the combined company's services businesses," and once complete is expected to "result in annual cost savings of approximately $1.8 billion," HP said. The job cuts are expected to allow HP "to restructure the EDS business group to streamline costs, invest in growth and drive shareholder value."

HP says merging resources with EDS is part of an ongoing evolution from a computer hardware company to a firm that combines hardware, software and services. The three-pronged offering is intended to capitalize on market trends including "cloud computing" and virtualization. "HP has a strong track record of making acquisitions and integrating them to capture leading market positions" said HP chief executive Mark Hurd.

HP has annual revenues of more than $38 billion, and as of August reported having 178,000 employees. It operates in more than 80 countries.

Copyright Agence France-Presse, 2008

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