HP is axing 14,500 jobs worldwide and cutting pension benefits in a sweeping restructuring operation that will take more than a year to complete.

During announcements made today HP executives refused to provide details of which geographical regions would be most affected by the cuts that are scheduled to take place over the next six quarters.

The axe will fall predominantly in what Mark Hurd, HP chief executive, called "redundant positions" including support functions, human resources and finance.

HP expects to see $1.9bn in savings by 2007, although the costs of the restructuring will be over $1bn.

"Cost structures and revenue growth go hand in hand," said Hurd. "Only by a good cost structure can we compete in the market. Our success lies in our own hands."

Chief among the proposed changes will be the dissolution of the Customer Solutions Group which dealt with SMEs and government contracts. It will be subsumed into the enterprise-focused Technology Solutions Group.

From the start of next year HP will also be cutting retirement benefits, a move it believes will save $300m a year.

Existing pensioners will see no change in their circumstances, but any new eligible HP retirees will see their benefits reduced as the company moves to a less generous scheme that tracks the stock market.

"HP's pension benefits were pretty cushy compared to others in the industry like IBM," Ted Schadler, principle analyst at Forrester, told vnunet.com.

"Mark Hurd saw an opportunity to make some changes and bring HP into line with others."