"As part of the restructuring, HP expects approximately 27,000 employees to exit the company, or 8 per cent of its workforce as of October 31, 2011, by the end of fiscal year 2014," the company said in a statement.
HP, which has more than 300,000 employees across the world, has been struggling with demand of PCs and printers.
The workforce reduction would generate an annual saving in the range of USD 3-3.5 billion by the end of the 2014 fiscal year. HP said majority of the funds will be reinvested back into the company.
The job cut will include an early retirement programme and "workforce reduction plans will vary by country, based on local legal requirements and consultation with works councils and employee representatives".
HP said it plans to use the savings to boost investment in innovation around its three areas of strategic focus -- cloud computing, big data and security, as well as in other segments that offer attractive growth potential.
In addition, the company plans to re-invest savings in research and development, mainly in its core business -- printing and computers besides the emerging areas.
"These initiatives build upon our recent organisational realignment, and will further streamline our operations, improve our processes, and remove complexity from our business," HP President and CEO Meg Whitman said.
"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," he added.
The move came as HP reported a 31 per cent decline in net earnings to USD 1.6 billion and a 3 per cent drop in revenue to USD 30.7 billion for the second quarter ended April 30, 2012.
HP expects to record a pre-tax charge of about USD 1.7 billion this fiscal for the restructuring efforts and USD 1.8 billion in charges through fiscal 2014. Besides, it would also record an impairment charge of USD 1.2 billion to write down the value of its Compaq brand.
During Q2, HP's personal computer group revenues were flat at USD 9.5 billion.