HP to gut nearly 8% of their workforce

Hewlett Packard CEO Mark Hurd decided that HP's future was in the more lucrative world of corporate service contracts when they purchased Electronic Data Systems in May of this year. That move placed them in direct competition with IBM, who also started with personal computers before specializing in corporate service contracts. In order to fully integrate EDS, HP has decided that 24,600 people have to go. HP believes that these job losses will make them more competitive each year to the tune of nearly $2 billion although there will be one-time costs of nearly the same amount to settle accounts with their departing employees (and other goodwill adjustments). When Hurd became HP's CEO in 2005, he began a downsizing of nearly 15,000 employees in order to maximize profits in the face of ever-shrinking personal computer margins. Their strongest profit area, despite additional competition, remains in printer ink.