HP sets $1bn investment, to cut 3,000 jobs

Hewlett-Packard plans to spend $1bn to bolster its corporate services business, and will shrink its workforce by 1 per cent, or 3,000 jobs, over three years.

The move follows the completion of its integration of EDS, which it bought in 2008 for nearly $14bn. It comes as technology companies battle one another for primacy in corporate data centers, which handle and store huge amounts of data and communications for businesses.

HP, the world's largest technology company by sales, said on Tuesday it would record a $1bn charge through its 2013 fiscal year. Half of the charge will be taken in HP's third quarter.

On a net basis, the company said it will save $500m to $700m annually by the end of its 2013 fiscal year.

The company plans to cut 9,000 jobs, but will replace about 6,000 of those positions, adding that the changes to the workforce will be made over time and vary by country. HP has about 304,000 employees worldwide.

Under the plan, HP will invest in new commercial data centers to help customers run their complex applications on more powerful computers. HP will also eliminate some of the enterprise services unit's older commercial data centers, management platforms, networks, tools and applications.

Shares of HP were down nearly 1 per cent at $45.58 in premarket trading on Tuesday.