HP To Hand over 25,000 Pink Slips In Bid To Slash Costs

HP, The world's biggest computer manufacturer, said yesterday that it would be reducing its workforce by nearly 25,000 over the next three years as it tries to assimilate the 145,000 or so employees from Electronic Data Systems which it acquired earlier this year.

More than half of the job losses - mostly from EDS - will come from outside the US with possibly several thousands job cuts across Europe although this only represents a fraction of the 320,000 employees of the joint entity.

HP acquired the IT Firm back in May 2008 for USD 13.9 billion in a bid to catch up with its arch-rival IBM in the services sector.

Back then, an early estimation put the number of job losses at 50,000 with most of them expected to come from non-core positions - finance, human resources, legal department - and the move is expected to cost the company at least USD 1.7 billion this quarter, but will result in roughly the same amount being saved annually.

The EDS acquisition is HP's second biggest acquisition after the 2002 takeover of computer manufacturer Compaq (which had acquired DEC as well) and the IT firm has collaborated with UK public bodies on a number of controversial projects - the Oyster card, the Child Support Agency and Inland revenue payment technologies.

The merged company will account for 7 percent of the IT services sector with IBM leading the pack with 10 percent.