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Hurd Tries To 'Optimize' HP Without Big Changes

New Hewlett-Packard president and chief executive Mark Hurd wants to "optimize" the $80 billion company, not transform it. In the first significant overhaul since he the took the reins in March, the only major change implemented was a 10% workforce reduction, leaving any revisions of the company's business units and product lines for another day, if ever.

HP's IT team, as well as the human-resources and finance departments, will be especially hard-hit by the 14,500 job reductions, which, along with other moves such as an elimination of the worker-pension plan, are expected to save nearly $2 billion annually.

But beyond a move to dissolve its sales organization, the standalone Customer Solutions Group, and return the sales force to its three main business units, Hurd left the business core of HP alone. "I have focused my efforts on optimizing HP as it is today," Hurd said in a statement.

CEO Hurd says cost cuts will generate substantial savings. -- Photo by Sipa Press

CEO Hurd says cost cuts will generate substantial savings.

It's not that changes aren't occurring at HP. Over the past five months there has been a major shuffling of the executive ranks. Hurd replaced Carly Fiorina in March, former palmOne president and chief executive Todd Bradley was named head of HP's PC business in June, and earlier this month former Dell CIO Randy Mott took a similar position at HP.

"The management team for the past several months has been focused on executing the current HP," Hurd said. "I think [the changes made last week] give us more flexibility as it relates to our future and our ability to reinvest in certain markets. Overall, it gives us a great opportunity in the future to be a significant player."

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