The move comes on the heels of a similar move by technology rival IBM, which now estimates its job reductions will total 14,500, up from an earlier estimate of 13,000 when it announced its overhaul.

The HP program is "designed to simplify its structure, reduce costs and place greater focus on its customers," the Palo Alto, California, company said in a statement, pegging its annual savings at save some 1.9 billion dollars.

"After a thorough review of our business, we have formulated a plan that will enable HP to begin delivering its full potential," Mark Hurd, HP's chief executive officer and president, said in a statement.

Hurd, the former CEO of NCR Corporation, who took the helm of HP from predecessor Carly Fiorina in March, built a reputation for restoring NCR through cost-cutting.

"The work starts today," Hurd said on a conference call. "We can perform better, for our customers and partners, our employees and our shareholders, and we will."

Hewlett-Packard is one of the world's information technology behemoths, with revenue totaling 83.3 billion dollars for the four fiscal quarters ended April 30.

About half the savings of the program will be used to offset market forces or will be reinvested "to strengthen HP's competitiveness," with the remainder flowing to operating profits.

The majority of job cuts will come in support functions, such as information technology, human resources and finance.

The company did not provide a geographic breakdown of the jobs reductions, but said a voluntary retirement program would be offered to long-serving staff based in the United States.

"Headcount-reduction plans will vary by country, based on local legal requirements and consultation with works councils and employee representatives, as appropriate," the company said.

Ben Reitzes, an analyst with UBS, called HP's move "a solid initial step" but noted that since the job cuts will be spread out over six quarters, the plan "could mean less of an earnings benefit in (fiscal year 2006) than expected."

Analysts say this round of cost-cutting, in the planning for months, likely will set the tone for Hurd's tenure as CEO.

In June, for example, Hurd split the personal systems group and imaging and printing group into separate entities -- just five months after Fiorina combined those operations.

"Today's announcement is one more example of how badly the computer sector is struggling. Among the largest job-cut announcements this year, two have come from computer firms," said John Challenger, chief executive officer of the consulting firm Challenger Gray and Christmas.

"The biggest question ... is why are computer firms cutting jobs now. The economy is growing at a healthy pace and employers are adding workers, but the tech sector, which led the expansion of the 1990s, is strangely absent from the recovery. Companies should be pouring money into new computers and software. Instead, they appear to be sitting on their cash."

Frank Gillett, principal analyst with Forrester Research, said he anticipates the HP announcement to be only the first step in a process through which the company needs to address its strategy and identity relative to its biggest rivals.

"It's natural to do triage first and streamline the existing business model," Gillett added. "But I think we're going to see things in the next six to 12 months that will show how HP competes against IBM and Dell."

HP shares fell 40 cents Tuesday to 24.52.

All rights reserved. � 2005 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.

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