HP will cutr 7.5 percent of its work force seeking to realize savings from its acquisition of Electronic Data Systems (EDS). HP will carry out the workforce reductions of EDS and HP employees over the next three years. Nearly half of the job reductions will take place in the United States. EDS was headquartered in Plano, Texas, near Dallas.SAN FRANCISCO
(Reuters) - Hewlett-Packard Co plans to cut 7.5 percent of its work
force, or 24,600 jobs, seeking to realize savings from its recent
acquisition of Electronic Data Systems Corp, the company said on Monday.
HP said it will carry out the cutbacks over the next three years,
while replacing about half the jobs in new areas of its services
business. It announced the plan ahead of a meeting with Wall Street
analysts to detail the merger plans.
Nearly half of the job reductions will take place in the United
States, the Palo Alto, California-based company said. EDS was
headquartered in Plano, Texas, near Dallas.
HP said it will take a charge of $1.7 billion in the fiscal fourth
quarter ending in October. Accounting for goodwill will cost $1.4
billion, while cost of the restructuring will involve anther $300
million.
HP estimated $1.8 billion in annual cost savings once the three-year cost-cutting program is completed.
"We are good at integrating companies ... I believe we will do it
well," Chairman and Chief Executive Mark Hurd told financial analysts
at the company's headquarters.
At the time the $13.2 billion merger of computer services provider
EDS into HP was announced in May, Hewlett-Packard counted 178,000
employees on its books and EDS had 142,000 employees.
Including the value of common stock, options and restricted stock
units, the enterprise value of the deal totals $13.9 billion. The deal
closed last month.
Hewlett-Packard said the vast majority of the cuts would focus on
eliminating overlapping jobs at EDS in corporate functions such as
legal, accounting, information technology and human resources.
Work-force reduction plans will vary by country, based on local
legal requirements and consultation with works councils and employee
representatives, HP said. The company will provide employees affected
by this restructuring program with severance packages, counseling and
job placement services.
(Reporting by Eric Auchard, editing by Richard Chang, Gary Hill)
© Thomson Reuters 2008 All rights reserved
Infrastructure 
