As rumors last week alluded to, HP announced they would be cutting 27,000 jobs as part of a restructuring plan led by CEO Meg Whitman. The reduction will eliminate eight percent of the company's total workforce by fiscal year 2014 at a pre-tax cost of roughly $1.7 billion in fiscal 2012 and an additional $1.8 billion through fiscal 2014.

HP is offering an early retirement plan although it's unclear if it will be offered to all of those on the chopping block or select employees. HP says workforce reductions will vary by country based on local regulations and meetings with employee representatives.

In addition to the job cuts, the company is planning to reduce costs by streamlining supply chains, reducing the number of products they produce and simplifying business and marketing strategies. By fiscal year 2014, HP believes the restructuring will generate savings in the range of $3.0 to $3.5 billion annually. HP will take these savings and reinvest them into research and development to capitalize on market trends.

"These initiatives build upon our recent organizational realignment, and will further streamline our operations, improve our processes, and remove complexity from our business," said Whitman. "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."

In addition to the cuts, HP reported second quarter results that saw revenue drop three percent from the same period last year to $30.7 billion. Net earnings for the quarter were $1.6 billion, down a whopping 31 percent year to year. Despite the drop, earnings topped Wall Street analysts' forecast of $0.91 per share, finishing at $0.98.