HP announces 24,600 layoffs in wake of EDS acquisition

HP plans to lay off 24,600 employees over the next three years; no word on local cuts

Hewlett-Packard will lay off about 24,600 employees over the next three years in an effort to streamline the company following its US$13.9 billion acquisition of Electronic Data Systems last month, the company announced Monday.

The company will lay off about 7.5 percent of its workers during that time, with nearly half of the reductions coming from HP's U.S. workforce, HP said.

About half of the positions will eventually be replaced, the company said.

The restructuring program is expected to save HP about US$1.8 billion each year, HP said. HP will take a $1.7 billion charge in the fourth quarter of 2008 related to the restructuring program.

The acquisition of systems integrator EDS was intended to give HP a comprehensive portfolio of IT products to help customers manage and improve their technology systems, HP said.

"HP now has the broadest technology capabilities in the market to meet customer needs today and in the future," Mark Hurd, HP chairman and CEO said in a statement. "HP has a strong track record of making acquisitions and integrating them to capture leading market positions."

The company is holding a meeting with financial analysts Monday afternoon at which it is also discussing its plans for integrating EDS.

No word on local cuts

Local employees of Hewlett-Packard and subsidiary EDS are facing an uncertain future.

HP has remained tight-lipped about how many Australian staff could be sacked.

“Please be advised there is no further information relating specifically to Australia at this time. If this changes we will let you know,” a HP Australia spokesperson said.

The layoffs are part of a three-year restructuring program, in which HP will lay off about 7.5 percent of its workforce.

More to follow.

-With Darren Pauli

Tags HP

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Grant Gross

IDG News Service

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