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By | Austin Modine 15th September 2008 22:58

HP's EDS acquisition to kill 24,600 jobs

This will Hurd a bit

There was little doubt employee heads would roll when Hewlett-Packard, owner of a massive IT services organization, paid $13.9bn for EDS, a similarly sprawling IT services outfit.

With Mark Hurd "the butcher" leading consolidation efforts at HP, employees could all but brace themselves for some substantial job culling.

Well, HP has finished tallying necks, and it says some 24,600 employees will lose their jobs in a "restructuring program" for the EDS business group to take place over the next three years.

The tech giant said workforce reduction will vary by country, based on local legal requirements and talks with works councils and employee representatives. Nearly half will occur in the US. The total number of layoffs planed equals about 7.5 per cent of the combined companies' workforce, according to HP.

Yet HP plans to replace roughly half of these positions over the three years "to create a global workforce that has the right blend of services delivery capabilities to address the diversity of its markets and customers worldwide."

Unless the half-and-half figure is purely a coincidence, this sounds like HP's restructuring plan is largely about shipping American EDS ops overseas.

HP said the job cuts are expected to result in annual savings for the company of about $1.8bn. It plans to reinvest the money in services sales coverage, delivery, and emerging markets.

The plan will cost HP $1.7bn in the fourth quarter of fiscal 2008. ®

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