Hewlett Packard said it is accelerating its jobs cuts in the wake of its $18bn merger with rival Compaq in order to gain bigger savings.

We think moving faster on headcount reductions is good for employees, particularly when it reduces uncertainty

Carly Fiorina

"We are moving faster and achieving more," HP chief executive Carly Fiorina told Wall Street analysts.

HP is sticking to plans to shed 15,000 staff, or 10% of its workforce.

Ms Fiorina said 10,000 of the job cuts will now take place before 1 November, the end of the firm's financial year.

Voluntary layoffs

By stepping up the pace of the layoffs, the group expects to save an extra $1bn over two years.

It had planned to save $2bn in 2003 and $2.5bn in 2004, but has now revised its targets to $2.5bn in 2003 and $3bn in 2004.

"We think moving faster on headcount reductions is good for employees, particularly when it reduces uncertainty," said Ms Fiorina.

Most of the job losses will take the form as voluntary redundancies, she said.

Ms Fiorina, whose own job as HP's chief executive was on the line as she battled opposition to the merger from Hewlett family shareholders, promised not to take a pay rise before other staff, after the cutbacks are complete.

Uncertain market

The chief executive did not rule out further layoffs, but said the current target was probably sufficient.

"We don't want to traumatize the organisation multiple times."

The market for personal computers remains "very, very soft right now,", said HP president and former Compaq boss Michael Capellas.

Global PC sales shrank last year for the first time ever, but Mr Capellas said there had been "a bit of a build up" in retail sales.

Revenue for the six months to November 2002 is expected to be between $35bn and $36bn - in line with the analysts' existing expectations.

HP's revenues are then set to grow by 4% in the next twelve months and by 6% in the financial year after that, said HP chief financial officer Robert Wayman.