Hewlett-Packard Co. To Cut 24,600 Jobs, Aims To Save $1.8B
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San Francisco — The chief executive officer of Hewlett-Packard Co., Mark Hurd, will cut 24,600 jobs in integrating the purchase of Electronic Data Systems Corp., aiming to save as much as $1.8 billion a year in his biggest workforce reduction yet.
The cuts, which will occur over three years, amount to 7.5% of the companies’ combined workforce, Hewlett-Packard said yesterday. Hewlett-Packard, the world’s biggest personal-computer maker, bought EDS last month for $13.2 billion to more than double revenue in its services unit.
Mr. Hurd, who cut 15,000 jobs when he took over in 2005, is striving to bring EDS’s profit margins in line with Hewlett-Packard’s as he steps up competition with International Business Machines Corp., the leader in managing corporate computer networks and data centers. Hewlett-Packard’s profit margins will be almost twice as large as EDS’s this quarter.
“This is clearly a chunk to bite off,” the president of research firm Endpoint Technologies Associates in Wayland, Mass., Roger Kay, said. “If anyone can digest it and bring it into the organization, it’s going to be Hurd.”
Hewlett-Packard, based in Palo Alto, Calif., climbed 37 cents to $45.70 in extended trading after closing at $45.33 on the New York Stock Exchange. The shares have dropped 10% this year.
Half the job cuts will be in America, Hewlett-Packard said. The company, which said it had more than 500 full-time and 1,000 part-time workers on the EDS integration team, will begin telling employees soon if their positions will be eliminated.
