Hewlett-Packard to cut 24,600 jobs after EDS acquisition

by Editor 9/17/2008 4:47:00 PM
Hewlett-Packard Chairman and CEO Mark Hurd and other HP executives have outlined the much anticipated restructuring plan following the firm’s $13.9 billion acquisition of IT services company EDS.

HP’s plans to integrate the business and technology services firm into its business include a workforce reduction: about 24,600 jobs will be cut over the next three years as part of the merger. HP’s aim is to better align the structure and efficiency of both businesses using the operating model that it has implemented in the last few years.

Almost half of the jobs affected by the restructuring plan are located in the U.S. The number of the positions – 24,600 – represents 7.5 percent of HP’s total workforce, which totals 320,000 employees.

The employees who lose their jobs in the restructuring process will be offered severance packages, counseling and job placement services.

Says Hurd: “HP now has the broadest technology capabilities in the market to meet customer needs today and in the future. HP has a strong track record of making acquisitions and integrating them to capture leading market positions. We will deliver on the promise of HP and EDS for our customers and shareholders.”

Michelle Warren, president of MW Research & Consulting, who had expected the cuts to amount to 10percent, points out the following:

“I like the fact that it's over three years. I think that lends itself to not being a complete shock to the HP system. This will enable them to continue to deliver their services over time, and the customers won't feel a shock in the headcount reduction, so they'll be able to integrate this change nicely.”

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