HP posts $8 billion EDS charge

Hewlett Packard has shuffled about its Enterprise Services top brass, appointing Mike Nefkens, senior veep and GM at HPES, to run the lot – for now. As for John Visentin, he will be leaving the company to “pursue other interests”. The company also warned that it will post an $8 billion Q3 charge tied to its Electronic Data Systems corp.

Along with Nefkens’ promotion, Jean-Jacques Charhon, senior VP and CFO at HP ES, has become chief operating officer and will account for “increasing customer satisfaction and improving service delivery efficiency”, which the company is hopeful will lead to profits.

But for EDS, which HP acquired in 2008, the write-down is thanks to market conditions in the services industry as well as recent stock trading values. Stocks dropped almost 60 percent since the EDS deal closed, the Wall Street Journal reports.

HP also changed its expectations of a pre-tax charge for Q3 relating to its restructuring program, which was announced earlier this year. This is because of a higher than anticipated acceptance rate under the early retirement program, the company says, as well as a faster than expected implementation of its “workforce reduction program”. Previous estimates were for a pre-tax charge of roughly $1 billion but now sit at as high as $1.7 billion.

The company, under the care of Meg Whitman, also expects an increase in Q3 earnings compared to earlier estimates.

Mystic Meg Whitman consulted her crystal balls earlier this year and, in a staggering demonstration of corporate clairvoyancy, predicted 27,000 HP staff would soon be out of work.