Wed, Jul 20, 2005 - Page 10 News List

HP to slash 10 percent of its workforce

AP , PALO ALTO, CALIFORNIA

Personal-computer maker Hewlett-Packard Co yesterday said it will cut 14,500 jobs, about 10 percent of its full-time staff, as part of a restructuring plan designed to save US$1.9 billion annually and boost business performance.

The job cuts will occur over the next six quarters, the firm said.

Most of the job cuts will come in support functions, such as information technology, human resources and finance, and the rest will be made inside business units.

The company said job cuts in sales positions will be minimal, and there will be little change to the headcount in research and development.

HP said it will offer a voluntary retirement program to longer-serving employees based in the US.

The company also said that as of January next year, it will freeze the pension and retiree medical-program benefits of current employees who do not meet defined criteria based on age and years of company service. Instead, HP plans to boost its matching contribution to most employees' 401(k) plans to 6 percent from 4 percent.

The company said these changes won't affect benefits currently received by retirees or eligible employees who are longer-serving and close to retirement age. Existing employees will retain benefits they have already earned.

Beginning in fiscal 2007, HP expects to save about US$1.9 billion a year, composed of US$1.6 billion in labor costs and US$300 million in benefits savings.

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