HP to cut 24,600 jobs as part of EDS integration

SAN FRANCISCO -- Hewlett-Packard Co. said Monday it plans to cut 24,600 jobs over the next three years, about 7.5 percent of its work force, as it combines operations with Electronic Data Systems Corp., the technology-services company it recently acquired.

Most of the cuts will come from within EDS's ranks, and nearly half will hit jobs in the U.S., HP said Monday after the markets closed.

The announcement marks the first time HP had put a number on how many employees of the combined company would lose their jobs. Before the acquisition, HP had 178,000 workers and EDS had 142,000, a total of 320,000.

HP was expected to reveal more details about the integration at a meeting with financial analysts in San Francisco later Monday.

Palo Alto, Calif.-based HP bought EDS for $13.9 billion in a bid to challenge IBM Corp. for more of the lucrative, long-term business of helping companies manage their computing infrastructure.

HP expects to save $1.8 billion per year from the cuts once the restructuring is complete. The company will incur a $1.7 billion charge in the current quarter, its fiscal fourth quarter, for a goodwill adjustment and other costs connected to the restructuring.

HP shares were up 18 cents at $45.51 in after-hours trading. Before the job cuts were announced, HP shares fell $1.64, 3.5 percent, to close at $45.33.