Hewlett-Packard’s (HPQ) plan to integrate technology-services provider EDS includes cuts of 24,600 jobs, or about 7.5% of the combined work force, H-P announced late Monday.
The restructuring program is expected to save $1.8 billion in costs and take place over three years, the company said. Nearly half of the job cuts are expected to come in the U.S., though H-P said that employees affected by this deal will be given job training, counseling, and severance packages.
The company also said that over the same three-year time period, it expects to replace roughly half of these positions “to create a global workforce that has the right blend of services delivery capabilities to address the diversity of its markets and customers worldwide.”
H-P said it will record a charge of $1.7 billion in the fourth quarter of fiscal 2008 relating to the restructuring program, $1.4 billion of which will be recorded as goodwill and $300 million of which will be recorded as a restructuring charge.
The acquisition of EDS, which was announced in May, continues a multiyear strategy to build out H-P’s position in the marketplace that began with the acquisition of Compaq, said Shane Robison, the company’s chief strategy and technology officer.
“H-P has a strong track record of making acquisitions and integrating them to capture leading market positions. We will deliver on the promise of H-P and EDS for our customers and shareholders,” said Mark Hurd, H-P chairman and CEO.
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