HP to cut 24,600 jobs in EDS-triggered restructuring
11:00 am EST September 17, 2008 - At a meeting with analysts on Monday, HP officials said that a total of 1,500 employees have been working on a strategy to cut 24,600 jobs and produce other cost efficiencies in integrating HP with its newly acquired EDS.
About 500 staffers are working on this task full-time, while 1,000 are doing so on a part-time basis, said Shane Robison, HP's executive VP and chief strategy and technology officer.
The integration effort is being spearheaded by HP CEO and President Mark Hurd and 12 other company "leaders," according to Robison.
"So this is how we spent our summer in Plano," he quipped, in reference to the town in Texas where the integration effort seems to be centered.
"We'll be a bigger, stronger company," Hurd told the analysts, pointing to plans to use the integrated HP/EDS outsourcing services as part of a menu of choices for customers that will also include software and cloud computing.
[by Jacqueline Emigh]
5:57 pm EDT September 15, 2008 - Hewlett-Packard has announced that as a part of its restructuring under CEO Mark Hurd, the company will lay off approximately 24,600 employees in areas where HP and its newly-acquired firm Electronic Data Systems (EDS) overlap.
When HP began the process of acquiring EDS several months ago, there was talk of potential layoffs, as the two companies had some overlap in their services. This was played down considerably. Hurd was quoted as saying "I don't see anything but goodness coming out of there...What's good for HP [is] good for the channel."
This afternoon, prior to a securities analyst meeting, HP outlined its plan for streamlining the EDS business group to "better align the combined company's overall structure and efficiency with the operating model that HP has successfully implemented in recent years."
The job cuts will take place over three years and represent 7.5% of the combined company's workforce, with half taking place within the United States. HP expects to save $1.8 billion annually from this reduction.
In last quarter's earnings call, Hurd showed that HP had managed to grow its revenue by 35% since he became CEO, and that earnings per share rose 239%. He attributed this dynamism to HP's diverse profile, where it can shift priority to different divisions depending on market conditions.
[by Tim Conneally]