HP cuts 27,000 jobs

ARS Technica reports HP will lay off much more jobs than anticipated. Last week there were rumors that HP would lay off up to 15,000 employees, but today news hit the wire that the firm will cut 27,000 of its 349,600 jobs by the end of 2014. HP's enterprise services group will take the hardest hit, but no unit of the company will be spared, according to HP CFO Cathie Lesjak.

Hewlett-Packard has seen hard times lately, but in an earnings call today the company tried to spin the layoff of about eight percent of its workforce as a necessary austerity measure. HP is making the layoffs as part of a restructuring plan that aims to make the company more competitive with IT companies like IBM.

In the PC market, the company joined Dell in reporting disappointing sales this quarter, and Bloomberg suggests that demand for smartphones and tablets is eating away at HP's bottom line. CEO Meg Whitman said the company needs to boost Research and Development spending—currently at $3.25 billion a year—to bring new products to market.

Whitman said this layoff effort would save HP between $3.0 and $3.5 billion by the end of fiscal year 2014, which will be reinvested into the company. Today's press release identified cloud services, security and storage products, and application lifecycle management software as a few areas in which the company plans to invest further, as a means of “enhancing HP intellectual property.”