NEW YORK (CNN/Money) -
Hewlett-Packard Co. plans to cut 10,000 jobs by November and 5,000 more in 2003, executives said Tuesday, as the computer maker quickly restructures itself and slashes costs following its purchase of Compaq Computer.
CEO Carly Fiorina, speaking at an analyst meeting, said the job cuts -- representing about 10 percent of its current work force -- would help HP save about $500 million this year, $2.5 billion by 2003, and $3 billion by 2004.
Those savings are greater than the company had initially estimated, since the job cuts, which are mostly being made through voluntary retirements, are coming more quickly than expected.
"We are moving faster and achieving more," Fiorina said.
Fiorina also said HP expects revenue in the second half of 2002 of between $35 billion and $36 billion. Analysts surveyed by earnings tracker First Call expected $36 billion in the second half.
HP expects revenue growth of between 4 and 6 percent in 2003 and between 7 and 9 percent in 2004. If HP meets First Call revenue expectations of $74.4 billion in 2002, then 4-to-6 percent growth would amount to 2003 revenue of between $77.7 billion and $79.2 billion, well above First Call's estimate of $76.3 billion.
Fiorina also said she would not take a salary increase before anyone else in the company.
HP (HPQ: down $0.04 to $18.81, Research, Estimates) shares were little changed in early trading.
Palo Alto, Calif.-based HP merged with personal-computer maker Compaq in early May, after a bitterly contested shareholder fight that dragged on for eight months until HP shareholders approved the deal by a narrow margin.
Opponents of the $19 billion merger contended that by taking Compaq into the fold, HP would be jeopardizing its strong position in printing and imaging while at the same time increasing its exposure to the flagging PC industry.
At the meeting, HP said it expected revenue for its printing and imaging business of between $10 billion and $10.5 billion in the second half of 2002 after generating $10 billion in the first half. Revenue from that business should grow about 10 percent in 2003 and 10 percent in 2004, HP said.
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HP said it expected PC revenue of between $9.5 billion and $10.5 billion in the second half of 2002, compared with $12.1 billion in the first half. The PC business will be unprofitable until 2003, the company said.
As the meeting continues, HP is expected to state its expectations for earnings per share. Wall Street analysts, on average, expect HP to earn 20 cents a share in the third quarter after earning 19 cents in the second quarter.