Hewlett-Packard is to cut 27,000 jobs by the end of 2014 in a move that will save the company up to $3.5 billion (£2.2 billion) a year.
In a drastic bid to revive its fortunes, HP will reinvest the money into the company as part of a "productivity initiative designed to simplify business processes". The cuts represent about eight per cent of HP's global workforce.
Meg Whitman, HP's chief executive who arrived in September 2011 to reverse the manufacturer's slump, commented, "While some of these actions are difficult because they involve the loss of jobs, they are necessary to improve execution and to fund the long term health of the company. We are setting HP on a path to extend our global leadership and deliver the greatest value to customers and shareholders".
A spokesman said it was too early to say exactly where the job cuts would hit, but no part of the business would escape some losses.
The cuts revelation has overshadowed news earlier this month that HP had overtaken Apple to again become the world's biggest seller of PCs. Instead, the news forms part of an enduring narrative that has brought some torrid press for the company, with Chief Executive Mark Hurd leaving over allegations of sexual harassment in 2010, his successor Leo Apotheker lasting less than a year in the job, and sales figures consistently falling short of expectations.
The restructuring also sees the head of HP's Autonomy division, Mike Lynch, replaced by Bill Veghte, HP's chief strategy officer. Lynch founded the start-up Autonomy and transformed it into one of the UK's largest software companies before it was sold to HP for $10 billion (£6.3 billion) last year. The BBC's technology expert Rory-Cellan-Jones tweeted that his departure was a "big blow for UK tech".