Hewlett-Packard to slash 27,000 jobs by 2014

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US computer giant Hewlett-Packard said on Wednesday it plans to cut 27,000 jobs, or eight per cent of its global workforce, by 2014 in a major restructuring effort.

The world's biggest personal computer maker said the move was part of ‘a multi-year productivity initiative designed to simplify business processes, advance innovation and deliver better results for customers, employees and shareholders’.

The restructuring is expected to generate annualized savings of $3.0-3.5 billion by the end of the 2014 fiscal year for HP, the largest maker of PCs, which is struggling amid a move to mobile devices and tablet computers.

The savings will mostly be reinvested back into the company and boost investment in areas such as cloud computing, big data and security, and other segments ‘that offer attractive growth potential’.

The workforce cuts will include an early retirement program and ‘will vary by country, based on local legal requirements and consultation with works councils and employee representatives, as appropriate’.

The move came as the Palo Alto, California-based firm reported a 31 per cent drop in profits in its second fiscal quarter to $1.6 billion. Revenue in the period fell three per cent from a year ago to $30.7 billion.

"We are making progress in our multi-year effort to make HP simpler, more efficient and better for customers, employees, and shareholders," said Meg Whitman, HP president and chief executive.

"This quarter we exceeded our previously provided outlook and are executing against our strategy, but we still have a lot of work to do."

Whitman has vowed to turn the company around after a series of problems including a failed tablet computer and an announcement that it was considering an exit from the PC business.

A former chief executive of eBay and unsuccessful candidate for governor of California, Whitman took the reins at HP in September after her predecessor, Leo Apotheker, was ousted after just 11 months on the job.

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