HP saves £1.9bn in Compaq merger

Link: Hewlett Packard to lay off 1,500 UK staff

Chief executive Carly Fiorina told Silicon Valley newspaper the Mercury News that the company would hit $3bn in annual cost savings from the merger a year earlier than it thought.

She said the company already has cut $2.4bn in costs and would reach $3bn by the end of its fiscal 2003. HP had thought it would take until 2004 to make such savings but the restructuring had worked extremely well Fiorina said.

She said that the company was accelerating its cost cuts although she refused to mention if more job cuts were likely.

Fiorina and her management team have axed 12,557 jobs since the $19bn merger was completed in May, and expects to reduce head count by a total of 17,900 by fiscal 2004.

Separately, IBM has confirmed that provided stock price remains strong, it will fully fund its pension plan with $3bn in cash and stocks. Previously, it had said there was a $4.5bn shortfall in its US pension plan. It had planned to fill the gap by investing $1.5bn a year for three years, said the Financial Times.

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