Hewlett Packard has announced the company will cut seven and a half percent of its workforce but plans to replace 50 percent of job losses over the next three years.
Hewlett Packard said yesterday the company will cut 24,600 jobs as the company attempts to integrate Electronic Data Systems into HP and streamline business. Job cuts were expected when the merger was eventually wrapped up and finalized but it seems no one expected such a large amount of cutbacks.
HP announced plans to acquire EDS in May of this year. The deal was closed August 26 and yesterday the company detailed the finer points of what the merger would entail, which apparently means laying off a chunk of staff. Bob Djurdjevic of Annex Research said that EDS had been cutting jobs before the acquisition and reports suggest that Electronic Data Systems will see the majority of the cutbacks.
HP will carry out the planned cutbacks over next three years, while replacing half of the jobs with positions in new areas of its services business. According to the Associated Press, the company expects to save $1.8 billion every year from the cuts but will incur a $1.7 billion charge for a goodwill adjustment and other costs connected to the restructuring.
HP’s acquisition put the company in second place in global technology services providers, second only to IBM. Prior to the deal the company sat at number five.