SAN FRANCISCO --
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, ahead of an analyst meeting to discuss the move.
Shares of H-P were up 42 cents at $45.75 in extended trading Monday.
H-P acquired EDS for $13.9 billion last month, making it the No. 2 player in the technology outsourcing market behind
The deal represents H-P's largest acquisition since its $24.2 billion purchase of PC maker Compaq in 2002.
While H-P has said the deal will provide various opportunities for cost savings and add to its bottom line next year on an adjusted basis, there has been concern on Wall Street about how good of a fit the two companies are -- particularly given EDS's low operating profit margins compared with those of H-P.
H-P is holding a special meeting with securities analysts Monday to provide more details on the integration plan and the financial aspects of the newly merged companies. H-P said Monday that it will take a charge of $1.7 billion in the fourth quarter of fiscal 2008 because of the restructuring, $1.4 billion of which will be recorded as goodwill, and $300 million of which will be recorded as a restructuring charge that will be included in H-P's GAAP financial results.
The layoffs are significant even by H-P's standards; the company has focused on reducing costs and finding operating efficiencies under the hand of CEO Mark Hurd. Shortly after Hurd took over in 2005, the company announced plans to slash 15,000 jobs from its payroll.
H-P said Monday that it plans to replace about half of the newly cut positions over the next three years to create a workforce with the "right blend of services delivery capabilities to address the diversity of its markets and customers worldwide."