HP to slash tens of thousands of jobs

After EDS buy

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By Ina Fried, 16 September 2008 08:26

NEWS

HP 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 in that time 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 $13.9bn. The deal closed in August. The company said that, once it has finished with the cuts, it expects the moves to save $1.8bn in costs annually. It said it does plan to reinvest in other areas.

On the accounting side, HP said it will record a $1.7bn charge in the fourth quarter of fiscal 2008 related to the restructuring programme. The company said that, of that charge, $1.4bn will be recorded as goodwill, and $300m 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.

CEO Mark Hurd said in a statement: "HP now has the broadest technology capabilities in the market to meet customer needs today and in the future. 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."

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