HP Third-Quarter Forecast Misses Estimate; 27

Hewlett-Packard, the world's largest PC maker, willeliminate the jobs by October 2014 through firings and earlyretirement offers, for an annual savings of as much as $3.5billion. Many of the cuts will come from the ailing enterpriseservices group, which manages data centers and providestechnology consulting. Services demand has slowed, and thedivision's profitability has declined amid competition fromcompanies just as International Business Machines Corp.

The job cuts will pare Hewlett-Packard's workforce of349,600. Particularly hard hit will be the enterprise servicesbusiness, which expanded when Hewlett-Packard bought ElectronicData Systems Corp. for $13.2 billion in 2008.

Customers want help modernizing business applications,retooling data centers for Internet-delivered cloud-computingsoftware, and analyzing reams of data, and Hewlett-Packarddoesn't have enough experts in those areas to win deals, formerCEO Apotheker and other executives have said.

The PC market

In the PC market, Hewlett-Packard is fighting Apple Inc.'srising market share for its Mac computers and iPad tablet.Hewlett-Packard's report follows No. 3 PC maker Dell Inc.'sforecast yesterday for lower-than-projected sales for thequarter ending in July, as demand for smartphones and tabletcomputers erodes PC sales.

Tablet sales are cutting into those of traditional laptops:118.9 million tablet devices will be sold in 2012, almostdoubling from 2011, according to market-innovation firm GartnerInc., with Apple accounting for 61.4 percent of the market. PCshipments worldwide will rise 4.4 percent to 368 million thisyear, Gartner estimates.