HP Announces 24,600 Layoffs in Wake of EDS Acquisition

Hewlett-Packard will lay off about 24,600 employees over the next three years in an effort to streamline the company following its US$13.9 billion acquisition of Electronic Data Systems last month, the company announced Monday.

The layoffs will be part of a three-year restructuring program, HP said in a statement. The company will lay off about 7.5 percent of its workers during that time, with nearly half of the reductions coming from HP's U.S. workforce, HP said.

About half of the positions will eventually be replaced, the company said.

The restructuring program is expected to save HP about US$1.8 billion each year, HP said. HP will take a $1.7 billion charge in the fourth quarter of 2008 related to the restructuring program.

The acquisition of systems integrator EDS was intended to give HP a comprehensive portfolio of IT products to help customers manage and improve their technology systems, HP said.

"HP now has the broadest technology capabilities in the market to meet customer needs today and in the future," Mark Hurd, HP chairman and CEO said in a statement. "HP has a strong track record of making acquisitions and integrating them to capture leading market positions."

The company is holding a meeting with financial analysts Monday afternoon at which it is also discussing its plans for integrating EDS.

(More to follow.)