Hewlett-Packard Will Cut 3,000 Jobs

June 1, 2010
Will automate commercial data centers

Hewlett-Packard, the world's leading personal computer maker, said on June 1 it would cut 3,000 jobs as it makes a one-billion-dollar switch to fully automated data centers.

The investment in its Enterprise Services business entails the elimination of 9,000 jobs over the next three years, HP said.

"As a result of productivity gains and automation, HP expects to eliminate roughly 9,000 positions over a multiyear period to reinvest for further growth and to increase shareholder value," the Palo Alto, California-based company said.

The company, in a presentation to analysts, said it would create 6,000 jobs in sales and deliveries as part of the restructuring.

HP has about 300,000 employees and operates in about 170 countries.

The company planned to take a charge of around one billion dollars over the next several years for the technology upgrade, enabling clients "to run their businesses faster and more efficiently."

HP expected the restructuring to deliver gross annual savings of about one billion dollars, and net savings of $500-700 million after reinvestment.

The restructuring is the latest in a series of steps HP has taken to integrate Electronic Data Systems (EDS), which it purchased in August 2008 and renamed HP Enterprise Services. HP bought Texas-based business services outsourcing giant EDS as part of a $13.9 billion deal aimed at creating a global powerhouse in computer services to compete against IBM. cIntyre noted that the purchase of EDS resulted in nearly 25,000 job cuts in 2009.

The operations account for about 25% of HPs revenue and about the same portion of its operating income, he said.

Last month HP posted better-than-expected quarterly results as technology spending revived across all markets, with net profit of $ 2.2 billion compared with $1.7 billion a year ago.

Copyright Agence France-Presse, 2010

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