Hurd: Iron hand

Calcutta, Sept. 16: Hewlett-Packard (HP) will cut its workforce by 7.5 per cent, or 24,600 jobs, as it restructures to integrate Electronic Data Systems (EDS) with itself. HP completed the acquisition of EDS in August for $13.9 billion.

The Palo Alto, California-based company expects to save $1.8 billion annually from the cost-cutting programme.

“We have a strong track record of making acquisitions and integrating them to capture leading market positions,” Mark Hurd, chairman and chief executive officer of HP, said in a release.

The restructuring programme will take place over three years. HP will replace about half the jobs in the new areas of its services business.

The cuts will be done in consultation with works councils and employee representatives.

Half the job cuts will take place in the US. The immediate impact on India is not known.

In India, HP employs over 30,000 employees.

The company said it would provide employees affected by this restructuring programme with severance packages, counselling and job placement services.

The acquisition of EDS made HP the world’s second largest provider of technology services, up from No. 5 previously. IBM is No. 1 in computer services, and HP wants to challenge this dominance. The deal bolsters HP’s business in the US and Britain, two strong markets for EDS, among commercial clients and government agencies.

The layoffs came as a big surprise to analysts who thought HP would be able to leverage overlapping functions in areas such as human resources and finance.