HP set to cut workforce by 24,600

HP's hopes its takeover of EDS will help it compete with IBM

Hewlett-Packard (HP), the world's largest computer company, says it plans to cut 24,600 jobs, almost 8% of its workforce, to streamline its business.

The cuts will take place over the next three years as it combines operations with Electronic Data Systems Corp., the technology company it recently bought.

EDS employees are expected to bear the brunt of the cuts.

HP hopes the acquisition will allow it to take on rival IBM and win more lucrative, long-term contracts.

Half of the jobs cuts will be in the US, with finance, human resources and legal departments expected to be affected.

The company said that it eventually planned to add about half the positions back as different jobs in different departments within the company.

HP's $13.9bn takeover of EDS is the firm's biggest acquisition since 2002 when it bought Compaq for $19bn.