HP Announces Plans to Integrate EDS While Reducing Workforce

HP has announced plans to restructure the EDS business group to streamline costs, invest in growth and drive shareholder value. The company said it intends to implement a restructuring program for the EDS business group that will better align the combined company’s overall structure and efficiency with the operating model that HP has implemented in recent years. In addition to making changes to its global workforce, HP has identified synergies in corporate overhead functions, such as real estate, IT and procurement.

The restructuring program will take place over three years and includes a workforce reduction that will streamline the combined company’s services businesses. Workforce reduction plans will vary by country, based on local legal requirements and consultation with works councils and employee representatives, as appropriate. Approximately 7.5 percent of the combined company’s workforce, or about 24,600 employees, will be affected over the course of the program, with nearly half of the reductions occurring in the United States. HP said it will provide employees affected by this restructuring program with severance packages, counseling and job placement services.

HP expects to replace roughly half of these positions over the next three years to create a global workforce that has the right blend of services delivery capabilities to address the diversity of its markets and customers worldwide.

Once completed, the company expects the restructuring program to result in annual cost savings of approximately $1.8 billion. These savings are net of reinvestments in areas including sales coverage, delivery optimization and emerging markets.

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