HP to cut 9,000 jobs and invest $1 billion in cloud computing

The world's biggest PC manufacturer Hewlett-Packard will cut 9,000 jobs and invest $1 billion to develop the next generation of cloud computing services, according to a statement Tuesday.

HP said it will invest $1 billion to create fully automated commercial data centers and expand its enterprise services unit over a multiyear period. The cuts are due to productivity gains and automation, but HP said it will replace 6,000 of the jobs by expanding its global sales and delivery staff.

The moves are part of HP's push to expand its cloud computing offerings, which allow users to access applications and services remotely. HP made a splash in the IT services market in 2008 by purchasing Electronic Data Systems, a merger that is now largely complete according to the HP Enterprise Services general manager Tom Iannotti.

"Over the past 20 months, we focused on integrating EDS and improving profitability," Iannotti. "These next generation services will enable our clients to benefit from the combined technology and services leadership that only HP offers."

HP said it would save between $500 million and $700 million annually by consolidating its operations.