Hewlett-Packard said Tuesday it will cut 14,500 jobs and overhaul its retirement program in a restructuring plan designed to save $1.9 billion annually and bring costs closer to those of competitors.
The cuts -- about 10 percent of its global work force of 150,000 -- will occur over the next six quarters. Most will affect support jobs such as information technology, human resources and finance.
"Our objective is to create a simpler, nimbler HP (HPQ) with ... clear accountability and greater financial flexibility," said HP CEO Mark Hurd on Tuesday. The restructuring had been anticipated since Hurd, former longtime chief executive of NCR, took the job four months ago after HP's board fired Carly Fiorina.
HP competes in a broad area of the technology industry where rivals including Dell in computers and IBM in consulting services have managed to squeeze higher profits. At the same time, HP's highly profitable printer and ink business is coming under increasing threat.
HP said in announcing the cuts Tuesday that sales positions would be minimally affected, and the headcount would be little changed in research and development. As part of the cuts, HP said it will offer a voluntary retirement program to longer-serving employees based in the United States.
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"Amazing" surge in PC sales: Worldwide shipments of personal computers rose 16.6 percent in the second quarter as international demand and price wars drove shipments to their highest quarterly growth rate in nearly five years, according to IDC, a tech research firm.
And in another sign of its dominance, Dell (DELL), the market leader, distanced itself from No. 2 PC maker Hewlett-Packard by posting 23.7 percent growth in the second quarter compared with 16.3 percent for HP, IDC said.
A report from another research firm, Gartner, put overall growth at a more modest 14.8 percent for the April-June period.
"This kind of growth in the PC market is just amazing," said Loren Loverde, director of IDC's Worldwide Quarterly PC Tracker. "At some point, we expect the flood of consumer and portable demand to let up, but so far falling prices and demand across regions and market segments continues to support growth."
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Let the music play: The University of California and California State University systems have struck a deal to offer legal music and movie downloading services to curb rampant piracy by students, the Los Angeles Times reported.
The deal announced Monday with Cdigix, an Englewood, Colorado, company, would offer the service to roughly 600,000 students at 13 UC and 23 Cal State campuses, making it one of the largest contracts since college campuses across the country began searching for legal solutions several years ago, the Times said Tuesday.
To give students additional downloading options, both university systems also are negotiating with other music and video providers, including Napster, Sony (SNE) and Mindawn.
"We're doing this because we do recognize that there is illegal file sharing of intellectual property," said David Walker, director of advanced technology at the University of California, which enrolls 200,000 students. "We felt we should do something to encourage legal services."
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Sprinting to the finish: Sprint said Tuesday that a judge had denied a motion by one of its affiliates, iPCS, to temporarily block Sprint and Nextel Communications from closing their merger.
Sprint said the Illinois judge had blocked it from sharing with Nextel certain information about its agreement with iPCS. A hearing in the case is scheduled for Friday.
Sprint, which hopes to close its purchase of Nextel this quarter, has already been hit with a lawsuit from another affiliate, UbiquiTel. It agreed last week to buy a third affiliate, US Unwired, partly to resolve a legal battle.
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AP and Reuters contributed to this report.
