HP announces 24,600 job cuts, takes one-time $1.7 billion EDS charge

HP has estimated $1.8 billion in annual cost savings once the three-year cost-cutting program is completed.

"HP has a strong track record of making acquisitions and integrating them to capture leading market positions. We will deliver on the promise of HP and EDS for our customers and shareholders," Hurd said, adding, "This is big and important to us. We know what we're doing."

According to HP CFO Cathie Lesjak, the integration of EDS into HP would cut into HP's net profits in its current fourth quarter ending in October and the 2009 fiscal year before turning positive during 2010.

"We do expect to emerge from this transformation with a very competitive cost structure and a much stronger presence with enterprise customers," Lesjak said.

Ann Livermore, executive vice president of HP's Technology Solutions Group, said the HP-EDS merger would help the company compete more aggressively for big business deals in a market that would be worth $451 billion by 2010.

According to industry analysts, the job cuts were expected as the company is seeking to put in place the most efficient cost structure that directly relates to the company's ability to scale and grow and address the diversity of its markets and customers worldwide.