Hewlett Packard has announced that it is to axe around 27,000 jobs over the next couple of years following a slide in annual profits.
The world’s largest maker of personal computers believes the move will generate annual savings of about $3.5bn at the end of the 2014 fiscal year, when the lay offs are expected to be completed, Reuters reports.
It comes just eight months after the US firm hired former eBay chief executive Meg Whitman as its CEO to turn the company around.
She said: “Work force reductions are never easy. They adversely impact people's lives, but in this case, they are absolutely critical to the long-term health of the company.
“Our goal is simple: a better outcome for the customers at reduced cost for HP.”
The announcement has already boosted HP’s shares by 11 per cent, according to Reuters.
HP, which has a global workforce of 350,000 employees, recenty reported a net income of $1.59bn in Q2 or 80 cents a share. Last year, it announced a net income of $2.3bn ($1.05 a share) – a significant difference.
While the US firm remains a key player in the consumer electronics field, a series of cost cutting measures implemented by its former CEO Mark Hurd is being blamed for the ailing firm's troubles.
Unlike her predecessors, Whitman, who has been at the helm for six months, plans to boost spending on research and development, especially in printing and PCs, with the savings from the cost cuts.
The firm also plans to re-enter the tablet foray later this year, Whitman announced.
HP ditched its webOS-toting TouchPad tablet in July last year, following weeks of disappointing sales.