NEW YORK (CNNMoney) -- Hewlett-Packard announced Wednesday that it is slashing 27,000 jobs in a widely expected maneuver aimed at slimming down the struggling tech giant.
The company expects the layoffs, which amount to 8% of its worldwide workforce, to save $3 billion to $3.5 billion by the end of 2014. The majority of those savings will be reinvested in research and development, HP said.
Shares of HP (HPQ, Fortune 500) jumped by nearly 11% in after-hours trading as investors cheered the company's restructuring efforts and positive outlook.
The changes "will further streamline our operations, improve our processes, and remove complexity from our business," Meg Whitman, HP's CEO, said in a prepared statement. "While some of these actions are difficult because they involve the loss of jobs, they are necessary to improve execution and to fund the long term health of the company."
HP said it expects the job cuts to "yield significant improvements in efficiency and customer service" over the next several years. The company plans to revamp its slumping PC and printing businesses and to invest in building up its cloud-based services for corporate customers.
Meanwhile, Whitman said on a conference call with investors on Wednesday that she remains "cautiously optimistic" about the future of the company. HP is recovering from a tumultuous 2011, in which then-CEO Leo Apotheker sought to shed the company's PC business, continually reduced financial estimates and was subsequently fired.
Whitman said the company is seeing "early signs" of a turnaround.
"While I wouldn't say we're turning the corner, we are making real progress," she said. "We're streamlining and removing complexity at every turn."
For the past quarter, HP reported a better-than-expected quarterly profit and sales. Though it offered a downbeat business outlook for the near future, it raised its forecast for the full year.
The Palo Alto, Calif.-based company said its net income for the fiscal second quarter, ended April 30, fell 31% to $1.6 billion
The results included one-time charges of 18 cents per share. Without the charges, HP said it earned 98 cents per share. Analysts polled by Thomson Reuters, who typically exclude one-time items from their estimates, had forecast earnings of 91 cents per share.
PC sales were flat as unit sales fell another 1%.
HP said it is rethinking its branding strategy across all product lineups, but particularly PCs. It plans to take a $1.2 billion write-down on the Compaq brand -- further diminishing former CEO Carly Fiorina's costly legacy.
The company is also in the process of restructuring its printing business, sales of which declined by 10% over last year. The unit was folded into its PC division last month.
Services sales declined 1%, and servers fell by 6%. The company's software business grew by 22%, but it remains a proportionally tiny part of HP's business.
Overall, sales fell 3% to $30.7 billion, edging past the nearly $30 billion analysts expected.
The investment in research and development should help sales down the road, Whitman said.
"As a world-class innovator, we should have excellent quality products," she said. "I think we have very good products, but I also think they can be better."
The company said that it expects to earn between 94 cents and 97 cents per share this quarter, excluding one-time charges, coming in well below analysts' median estimate of $1.02 per share.
But HP said its cost-cutting will start to pay off soon: It now expects to earn between $4.05 and $4.10 per share for the full year, up from previous guidance and higher than analysts' forecasts." 
