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HP to Slash 2,500 Jobs Amid Declining Sales

October 03, 1998|From Bloomberg News

PALO ALTO — Hewlett-Packard Co. on Friday said it will eliminate 2,500 jobs, or about 2% of its work force, because of weak sales of test and measurement devices and electronic components.

The announcement by the world's third-largest computer maker was one of a number of layoff announcements made by U.S. companies. Among them was energy services Halliburton Co., which said it will eliminate about 5,250 jobs and close about 400 offices worldwide as part of its plan to save $250 million a year from its Dresser Industries Inc. acquisition and to reduce expenses as lower oil prices cut into its business.

For the first time since 1992, Hewlett-Packard will ask for volunteers to take severance packages. Top managers already are taking pay cuts, and HP plans to close offices around the world.

HP, which has 127,200 workers worldwide, has seen sales of oscilloscopes and other electronic-test equipment slump, especially in Japan.

HP shares fell 38 cents to close at $49.75 on the New York Stock Exchange.

The company disclosed last month that it will take a $150-million charge in the fourth quarter ending this month for its cost-cutting measures.

Analysts expect HP to earn 76 cents a share in the fourth quarter, according to First Call Corp. The company earned $806 million, or 75 cents a share, in the year-ago period.

Palo Alto-based HP hopes to cut 800 workers in Silicon Valley.

Also Friday, Dow Jones & Co. said it is offering early retirement incentives to about 340 employees.

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