HP to cut 24,600 jobs in EDS-triggered restructuring
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]