HP blames Euro laws for drawn-out job cuts

It will take 18 months for HP to cut 10 per cent of its workforce, says chief executive Mark Hurd

HP announced on Tuesday that it will cut 14,500 jobs over the next 18 months.

When asked why it would take six quarters to finish the process, newly installed chief executive Mark Hurd blamed European regulations.

"In some European countries it can take a year to release someone," he told journalists in a telephone briefing. Hurd refused to say how the cuts would split by country but appeared to indicate that Europe would be hit as hard as anywhere.

The job cuts had been widely expected. While admitting that many corporate positions would be going, Hurd said that "most of our employees are not based in the US" while "many of our corporate functions are in the US".

The biggest single shake-up was the abolition of the Customer Solutions Group which is to be merged into the three main business units.

HP hopes that its restructuring plan will bring its costs in line with those of competitors like Dell and IBM.

HP said the broad changes will save it about $1.9bn (£1.1bn) each year starting in the summer of 2006. In its current fiscal year, the company expects to save between $900m and $1.05bn.