New From HP: PinkSlipJet EDS Edition

Cost-cutting is one of my favorite subjects. We have quite a bit more to do.”

– HP CFO Cathie Lesjak, Sept. 10, 2008

When Hewlett-Packard (HPQ) CFO Cathie Lesjak said she was fond of cost-cutting, she wasn’t kidding. On Monday HP announced plans to cut 24,600 jobs over the next three years as it digests Electronic Data Systems, the technology services giant it acquired for nearly $14 billion this summer. The job cuts amount to about 7.5 percent of the combined company’s total workforce, and most will come from EDS, whose bloated cost structure was in need of a good trim. HP estimates $1.8 billion in annual cost savings once the three-year program is completed. “I think most of you that follow us know I am a big believer that having the most efficient cost structure directly relates to your ability to scale and grow,” HP CEO Mark Hurd explained to securities analysts.

Incidentally, 24,600 sacked employees is a new record for Mark Hurd, whose first big act as HP’s CEO was a restructuring that eliminated some 15,000 jobs.

[Image credit: jischinger]