18th July 2005 Hewlett-Packard will announce thousands of job cuts tomorrow including hundreds of jobs in the UK, according to reports. The move will significantly reduce staffing costs for HP.

Although details of the restructuring have not yet been officially announced, Wall Street analysts have estimated that as many as 25,000 jobs will go. The general consensus is that the total job losses will be closer to the 15,000 mark – that would still account for 10 percent of the overall workforce.

According to a report published by financial analysts Sanford C. Bernstein &Co. in June 2005, the cost-cutting drive could also involve shutting down non-essential research and development projects, reducing advertising spend and streamlining the sales force.

The restructuring is the most significant action instigated by CEO Mark Hurd since he joined the company in March 2005. At the time of his appointment, Hurd was touted as a pragmatist and cost cutter, with a strong reputation for operations – a notable weak spot for his predecessor Carly Fiorina.

Shortly after his appointment, Hurd told Wall Street analysts that “Hewlett-Packard has a cost structure that is off benchmark in many areas.”

Hewlett-Packard’s fortunes have suffered somewhat in recent years. Although its highly profitable printing and imaging division leads the market, HP’s personal computer and server divisions have struggled to compete with Dell Computer and IBM.

In June of this year, Hewlett Packard separated its printing and imaging division from the PC division, reversing a merger initiated by Fiorina in January.

“By managing PSG and IPG (image and printing group) as separate, highly focused organisations, we can further sharpen our competitiveness and improve our cost structures,” said Hurd at the time.

Update: 19th July 2004 Hewlett-Packard has announced that it will cut 14,500 jobs. This will yield $1.9 billion in annual savings, but cost the company $1.1 billion every quarter for the next six quarters.