Hewlett Packard Co. (NYSE:HPQ) has unveiled its strategic goals following the completion its acquisition of IT company Electronic Data Systems Corp. (EDS) on August 26. Mergers like these usually entail job losses and streamlining, although the scale of the job cuts announced by HP took the industry by surprise.
HP said it expects to cut its workforce by a staggering 25,000, 7.6% of its workforce over the next three years, following the closing of its acquisition of EDS. HP's share fell 3.5% yesterday, giving it a market cap of $110 billion. The company currently employs 320,000 people worldwide.
HP's downsizing and acquisition of EDS is also likely to have an impact on the Israeli market. EDS employs 1,000 people in Israel and HP employs 5,000. 700-800 of these are employed in administrative, marketing and sales roles, which are the jobs most likely to be lost. A uniform cut of the type carried out by most multilationals, will probably reduce the workforce of the newly merged company in Israel by 100, assuming that the company is planning one round of cuts only, and that the downsizing will not be extended to HP's software and printer divisions, which employ thousands more people in Israel
HP Israel and EDS Israel declined to comment.
Published by Globes [online], Israel business news - www.globes-online.com - on September 16, 2008
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