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HP to cut 24,600 jobs as part of EDS integration
2008-09-15
SAN FRANCISCO - Hewlett-Packard Co. said Monday it plans to slash 24,600 jobs over the next three years, nearly 8 percent of its work force, as it combines operations with Electronic Data Systems Corp., the technology-services company it recently acquired. Most of the cuts will come from within EDS's ranks, and nearly half will hit jobs in the U.S., HP said Monday after the markets closed. HP had not previously detailed how many employees of the combined company would lose their jobs. Before the acquisition, HP had 178,000 people and EDS had 142,000, a total of 320,000. HP was expected to reveal more details about the integration at a meeting with financial analysts in San Francisco later Monday. Palo Alto, Calif.-based HP bought EDS for $13.9 billion in a bid to challenge IBM Corp. for more of the lucrative, long-term business of helping companies manage their computing infrastructure. HP expects to save $1.8 billion per year from the cuts once the restructuring is complete. The company will incur a $1.7 billion charge in the current quarter, its fiscal fourth quarter, for a goodwill adjustment and other costs connected to the restructuring. HP CEO Mark Hurd has been aggressive about cutting costs since he was hired in 2005. His first big act was a major restructuring that eliminated nearly 15,000 jobs. Hurd's changes have helped HP wring more profits from its businesses even as the personal-computer industry as a whole grapples with shrinking profit margins, and HP's crown-jewel business -- printer ink -- faces intensifying competition from lower-cost competitors. HP shares fell $1.64, or 3.5 percent, to $45.33 in regular-session trading. In after-hours trading, the stock gained 42 cents to $45.75.
Oracle, HP unveil computer to cope with digital explosion (2008-09-25)HP surprises Wall Street with size of EDS job cuts (2008-09-16)HP to cut 24,600 jobs as part of EDS integration (2008-09-15)Job cuts likely in HP's overhaul of printing group (2008-06-18)HP to buy EDS for about $12.6 billion in cash (2008-05-13)
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