H-P Slashes Jobs (Update)

SAN FRANCISCO -- Hewlett-Packard(HPQ Quote) will lay off more than 24,000 workers as it integrates recently acquired technology services firm EDS into its own operations.

The job cuts, which amount to roughly 7.5% of the combined company's workforce, will result in annual cost savings of $1.8 billion, H-P said Monday in a meeting to discuss the tech firm's largest acquisition in years. Since the deal was announced, some investors have voiced concerns about whether Plano, Texas-based EDS will act as a drag on H-P's business.

H-P CEO Mark Hurd said Monday that the combination with EDS provides "a new pillar" in its business, and positions H-P to tap into an overall market opportunity he pegged at almost half a trillion dollars.

H-P said the deal would contribute to its bottom line in fiscal 2010, injecting an additional 11 cents to 16 cents to its EPS. In fiscal 2009, however, H-P expects the deal to hurt EPS by between 11 cents to 16 cents. And the company sees a hit of 17 cents to negative 19 cents hit to EDS in the fiscal fourth quarter of the current year.

The company said it still expected its adjusted EPS this quarter to range between $1.01 and $1.03, but warned that changes in currency exchange rates in the last month have put pressure on revenue. H-P had previously projected revenue in the fiscal fourth quarter between $30.1 billion and $30.3 billion.

Shares of H-P were up 37 cents at $45.70 in extended trading Monday.