FORTUNE — Hewlett-Packard’s
plan to eliminate as many as 16,000 jobs, bringing the total worker cuts up to nearly 50,000, will make the company “more efficient and effective,” CEO Meg Whitman said Friday.
The additional job cuts, revealed in the company’s quarterly earnings report Thursday, are part of Whitman’s five-year plan to turn the PC maker around and is the third upward revision to job eliminations since her strategy went into effect two years ago. The pink slips will be spread across the company and will affect all geographic regions, Whitman said. The layoff totals count for between 3% and 5% of HP’s overall workforce, and they are expected to save $1 billion in operating costs by 2016.
Whitman said that years of mergers and acquisitions have bloated HP’s headcount. The company bought Compaq in 2002, EDS in 2008 and 17 different software companies over the years. EDS alone had almost 140,000 employees when HP made its offer.
“These acquisitions never got integrated quite the way they should have,” said Whitman in an interview on CNBC’s Squawk on the Street. “And there still is pockets, big pockets of inefficiencies.”
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Wall Street appeared to approve Whitman’s plan, with HP’s share price up as much as 7 percent mid-session Friday: The biggest gain in six months.
Whitman told Re/Code Thursday that this is the last increase to job cuts as part of her restructuring plan. Slimming down the HP workforce will help meet customers demands faster and better, as many buyers find that the company is “a little bit difficult to do business with,” she said.
“We need to have speed and agility. We need to be nimble in what is an enormously rapidly changing marketplace,” said Whitman. “So, while no one likes to reduce the workforce, this will be good for our customers and good for Hewlett-Packard.”