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update Hewlett-Packard (HP) says it plans to cut 27,000 jobs, or 8 per cent of its global workforce, by 2014, in a major restructuring effort for the computer giant.

The world’s biggest personal computer maker said that the move is part of “a multi-year productivity initiative designed to simplify business processes, advance innovation and deliver better results for customers, employees and shareholders”.

The restructuring is expected to generate annualised savings of US$3 billion to US$3.5 billion (AU$3.07 to AU$3.58 billion) by the end of the 2014 fiscal year for HP, which is struggling amid a move to mobile devices and tablet computers.

The savings will mostly be reinvested back into the company, and will boost investment in areas such as cloud computing, big data and security, and other segments “that offer attractive growth potential”.

The workforce cuts will include an early retirement program and “will vary by country, based on local legal requirements and consultation with works councils and employee representatives, as appropriate”.

HP told ZDNet Australia today in a statement that specifics around Australian job cuts are still to be announced. The company added, however, that it expects the workforce reduction to impact “just about every business and region”.

The company will also seek savings in other ways, including improvements in its supply chain and simplifying some business processes.

“These initiatives build upon our recent organisational realignment, and will further streamline our operations, improve our processes and remove complexity from our business,” said Meg Whitman, HP president and chief executive.

“While some of these actions are difficult, because they involve the loss of jobs, they are necessary to improve execution and to fund the long-term health of the company.

“We are setting HP on a path to extend our global leadership and deliver the greatest value to customers and shareholders.”

The move came as the Palo Alto, California-based firm reported a 31 per cent drop in profits in its second fiscal quarter to US$1.6 billion (AU$1.64 billion).

Revenue in the period fell 3 per cent from a year ago, to US$30.7 billion (AU$31.44 billion).

The results excluding special items amounted to 98 US cents per share, which was better than expected. And revenues were above most Wall Street estimates, as well.

In after-hours trading, HP shares jumped 5.69 per cent to US$22.28.

“We are making progress in our multi-year effort to make HP simpler, more efficient and better for customers, employees and shareholders,” Whitman said.

“This quarter we exceeded our previously provided outlook and are executing against our strategy, but we still have a lot of work to do.”

Whitman has vowed to turn the company around after a series of problems, including a failed tablet computer and a reversal on plans for its PC unit.

A former chief executive of eBay and unsuccessful candidate for governor of California, Whitman took the reins at HP in September after her predecessor, Leo Apotheker, was ousted after just 11 months in the job.

In the quarterly results, HP said that revenues from its Personal Systems Group, which includes the PC division, were flat year over year.

Desktop sales were up 5 per cent, notebook units were down 6 per cent and total unit sales were down 1 per cent.

Last year, HP announced the discontinuation of the TouchPad, a tablet computer powered by its own webOS software, just seven weeks after it hit the market dominated by Apple’s iPad.

HP also said last year that it was readying plans to spin off its PC division, and stop making tablet computers, but reversed course later, after naming Whitman as chief executive.

The low-margin PC market has been flat amid an astronomical increase in powerful smartphones and the arrival of hot-selling tablet computers such as the iPad.

Luke Hopewell also contributed to this article.

Updated at 10.10am, 24 May 2012: added comment from HP about Australian job cuts.