HP to cut 14,500 jobs in overhaul

SAN JOSE, Calif. — Computer and printer maker Hewlett-Packard Co., a major employer in Boise, said Tuesday it will cut 14,500 jobs and overhaul its retirement program in a restructuring plan designed to save $1.9 billion annually and bring costs closer to those of competitors.

The company didn't immediately say how the revamp would affect HP's Boise campus, which employs about 3,400 workers. Phone calls to Emily Horn, a company spokeswoman, weren't immediately returned.

The cuts — about 10 percent of its global work force of 150,000 — will occur over the next 18 months. Most will affect support jobs such as information technology, human resources and finance. HP now has about 58,000 workers in the United States, including 9,000 in the San Francisco Bay area, though the company declined to specify what locations will be hardest hit.

"Our objective is to create a simpler, nimbler HP with . . . clear accountability and greater financial flexibility," said HP CEO Mark Hurd on Tuesday.

The restructuring had been anticipated since Hurd, former longtime chief executive of NCR Corp., took the new job four months ago after HP's board fired Carly Fiorina.

HP competes in a broad area of the technology industry where rivals including Dell Inc. in computers and IBM Corp. in consulting services have managed to squeeze higher profits. At the same time, HP's highly profitable printer and ink business is coming under increasing threat.

HP said in announcing the cuts Tuesday that sales positions would be minimally affected, and the head count would be little changed in research and development.

As part of the cuts, HP said it will offer a voluntary retirement program to longer-serving employees based in the United States.

The company also said that beginning in January, 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.

Just prior to Fiorina's departure, the company merged its printer and PC group — a move Hurd reversed last month. In May, Hurd described the cost structure at some HP divisions as "off benchmark."