The Palo Alto computer giant disclosed in a filing Monday that a combination of early retirements and layoffs has grown by 2,000 to a total of 29,000 workers.
While the company did not explain the additional cuts, much of that increase is attributed by insiders to more employees than expected signing up for an early retirement plan. The plan is open to U.S. employees whose combined age and years of service equals 65 years or more.
The downsizing, which will extend through Oct. 31, 2014, was announced at the end of May by CEO Meg Whitman as part of a streamlining of the company. The workforce trimming affects nearly every department, she said at the time. The reduction amounts to about 8 percent of HP's workforce.
Part of the streamlining involves consolidating units in the company's lackluster business services division and eliminating 8,000 positions. A big part of that operation was acquired with Texas-based EDS, which HP bought in 2008.
About 8,500 employees are taking early retirement, the company said in the filing with the Securities and Exchange Commission. Most will leave the company on Aug. 31. HP is paying out lump sum benefits of
Employees taking early retirement can continue health coverage at active employee contribution rates for two years, the company said. For employees not eligible for some company subsidized medical plans, HP is providing up to $12,000 in employer credits under a company retirement medical savings account program.
The company's largest previous restructuring was in 2008, when it disclosed a plan to eliminate 23,600 employees over three years. In June 2010, HP announced it was cutting about 9,000 positions "over a multiyear period to reinvest for future growth." In 2005, it announced a reduction of 14,500 workers during the following 18 months.
In the filing, the company increased the cost of its restructuring program from $3.5 billion to approximately $3.7 billion through 2014, a majority funded through its U.S. pension program. About $3.3 billion relates to the workforce reductions and the early retirement program.
HP reported an $8.9 billion third-quarter loss in August, its biggest ever. The loss was due to one-time charges that include a write-down on paper related to its 2008 acquisition of tech services provider EDS. and an earlier purchase of PC-maker Compaq.
Under accounting rules, companies typically must take a write-down on what's called "goodwill" when the business value of a large acquisition declines from the price for which it was purchased.
Contact Pete Carey at 408-920-5419