HP gears up to slim down

HP executives are expected this weekend to put the final touches to a reorganisation that could result in the loss of about 15,000 jobs.

The job cuts would then be announced on Monday, a source familiar with the company said. As previously reported, as many as 15,000 employees could be let go.

The layoffs are part of CEO Mark Hurd's cost-cutting measures to bring HP's spending more in line with that of its rivals. The Palo Alto, California-based company has been paring down its work force over the past year, making cuts in the storage and server group and in the printing and imaging group that resulted in a $177m charge during its fiscal second quarter.

An elimination of 15,000 jobs - less than 10 per cent of HP's employees - would not be way off base, the source said.

An HP representative said the company declined to comment.

Despite the prospect of massive layoffs, HP's workers are responding favourably to Hurd, who has only been in the CEO post for a few months, the source added.

"People feel he is a straight shooter and doesn't mince his words," the source said. "People have responded to him positively, they like and respect him and view him as a leader. This response from employees has happened in a much shorter time than was imagined."

The number of jobs lost could extend beyond 20,000 positions, according to estimates reported on Thursday by analysts at research firm Moors & Cabot. Wall Street analysts have suggested HP should make between 5,000 and 25,000 job cuts and even separate its various product lines to keep competitive.

Changes to HP's upper management are also expected. Earlier this week, the tech giant named Randy Mott, formerly chief information officer at Dell, as executive vice president and new CIO. It also gave Gilles Bouchard sole responsibility for its global operations.

HP is expected to post its quarterly earnings on 16 August, giving the company ample time to announce changes to its work force and to work on its bottom line.

Dawn Kawamoto writes for CNET News.com