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2008-09-04  BUSINESS | Alpharetta, Suwanee impact unknown after HP announces cuts, new jobs
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| | by Bob Pepalis | |  |
September 16, 2008
HP's acquisition of EDS has the company planning a restructuring program that will cut about 24,600 employees from the 325,000 people who work for the combined companies.
The workforce reductions will take place over the next three years, according to HP. The areas reduced have many duplicate functions, such as legal, accounting, human resources, real estate and procurement. Approximately half of the reduction will be in the United States.
HP's operations in this area include data centers in both Alpharetta and Suwanee, and additional operations in Alpharetta and Atlanta.
It's safe to assume some reductions will be made in HP's fourth quarter, which ends Oct. 31. The company's new fiscal year starts Nov. 1. The timing relates to the completion of the EDS acquisition on Aug. 26.
A news release placed on the company's Web site Monday said "HP expects to replace roughly half of these positions over the next three years to create a global workforce that has the right blend of services delivery capabilities to address the diversity of its markets and customers worldwide."
"Which, of course, is the heart of EDS and why this thing is such a good deal for the company," a spokesperson said Tuesday.
"HP now has the broadest technology capabilities in the market to meet customer needs today and in the future," said Mark Hurd, HP chairman and chief executive officer. "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."
The company said once the restructuring program is completed, annual cost savings are expected of approximately $1.8 billion.
HP will record a charge of $1.7 billion in the fourth quarter of fiscal 2008 relating to the restructuring program, $1.4 billion of which will be recorded as goodwill and $300 million of which will be recorded as a restructuring charge that will be included in HP's GAAP financial results.
The company's spokesperson said HP has tried to offer a unique position for CIOs that continues the foundation of hardware HP has developed. The second phase has been an investment in software through acquisitions and research and development. The third piece of the pie is through services offering. The acquisition of EYP for its data center design work is an example of that.
Using what HP calls brilliant software to operate data centers and other operations, cost savings can be gained as fewer people are needed to run those operations, the spokesperson said.
HP, the world's largest technology company, provides printing and personal computing products and IT services, software and solutions to simplify the technology experience for consumers and businesses.
- www.northfulton.com
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