HP to cut 9,000 jobs, take $1 billion charge

From CNET News.com: Hewlett-Packard is spending $1 billion and cutting 9,000 jobs in a restructuring designed to consolidate and invigorate its enterprise services.

The company announced Tuesday that it plans to spend the money to invest in a series of commercial data centers that will offer enterprise customers a more integrated platform on which to run their businesses. The initiative will also consolidate HP's data centers, networks, and applications. But as a result of the increased streamlining and automation, HP expects to eliminate around 9,000 jobs over the next few years.

To pay for the enterprise restructuring, HP will take a charge of about $1 billion over an unspecified number of years that will be included in its financial results. Once the restructuring is complete, the company said it expects to save around $1 billion each year before taxes and between $500 million and $700 million after taxes.

"Over the past 20 months, we focused on integrating EDS and improving profitability," Tom Iannotti, senior vice president and general manager of HP Enterprise Services, said in a statement. "Now that the integration is largely complete, we have identified significant opportunities to grow and scale the business. These next-generation services will enable our clients to benefit from the combined technology and services leadership that only HP offers."

In its most recent quarter, HP reported revenue rising 13 percent to just over $30 billion, and earnings up as well to $1.09 per share, on what the company called "strong performance across every region." Even so, CEO Mark Hurd warned not to expect big spikes in corporate spending in the near future.

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