SAN FRANCISCO -- Hewlett-Packard Co. plans to cut 27,000 jobs as the growing popularity of smart phones, the iPad, and other mobile devices makes it tougher to sell personal computers.
The cuts announced Wednesday represent H-P's largest payroll purge in its 73-year history. The reductions will affect about 8 percent of H-P's nearly 350,000 employees by the time the overhaul is completed in October, 2014.
Word of the mass layoff had leaked out in media reports late last week, so the news didn't come as a surprise.
H-P hopes to avoid as many layoffs as possible by offering early retirement packages.
The Palo Alto, Calif., company expects to save as much as $3.5 billion annually from the job cuts and other austerity measures.
H-P Chief Executive Officer Meg Whitman plans to funnel most of the savings into developing more products and services that could help the company adapt to technological shifts. Those changes are driving demand for more mobile computing and for software provided over high-speed Internet connections, rather than installed on individual computers.
Investors seemed delighted with the shake-up. H-P shares surged $2.42, more than 11 percent, to $23.50 in extended trading after the announcement.