Post-merger cuts save HP $3bn

Hewlett Packard (HP) claims to have achieved cost savings of more than $3bn (£1.9bn) following its acquisition of Compaq.

Chief executive Carly Fiorina told Silicon Valley newspaper the Mercury News that the cost savings would hit the $3bn mark a year ahead of schedule.

Fiorina said the company had already cut $2.4bn (£1.52) in costs and that this total would reach $3bn by the end of fiscal 2003.

HP had originally thought it would take until 2004 to make such savings but the restructuring had worked extremely well, Fiorina said.

She added that the company was accelerating its cuts, but refused to say if more job losses were likely.

Fiorina and her management team have axed 12,557 jobs since the $19bn (£12.1) merger was completed in May. They expect to reduce HP's total headcount by 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.