Earlier last week, rumors hinted that HP would lay off 10,000 to 15,000 employees, but today the company revealed that 27,000 of HP's 349,600 employees will be cut by the end of 2014. According to Bloomberg, Hewlett-Packard CFO Cathie Lesjak said no unit of the company will be spared cuts, but the enterprise services group will take the hardest hit.

Hewlett-Packard has seen hard times lately, but in an earnings call today the company tried to spin the layoff of about eight percent of its workforce as a necessary austerity measure. HP is making the layoffs as part of a restructuring plan that aims to make the company more competitive with IT companies like IBM.

In the PC market, the company joined Dell in reporting disappointing sales this quarter, and Bloomberg suggests that demand for smartphones and tablets is eating away at HP's bottom line. CEO Meg Whitman said the company needs to boost Research and Development spending—currently at $3.25 billion a year—to bring new products to market.

Whitman said this layoff effort would save HP between $3.0 and $3.5 billion by the end of fiscal year 2014, which will be reinvested into the company. Today's press release identified cloud services, security and storage products, and application lifecycle management software as a few areas in which the company plans to invest further, as a means of “enhancing HP intellectual property.”

This is the latest in Whitman's efforts to turn HP around since former HP CEO Léo Apotheker was ousted due to slipping sales in September 2011. A lack of strong leadership has damaged the company over the past year: HP first discontinued products like its WebOS-running HP TouchPad, and then offered to license WebOS to others before announcing that it would leave the operating system in the hands of the open source community. Apotheker declared last summer that HP was thinking about exiting the personal computer market, but Whitman then officially reversed that decision a few months later.

Clearly, Whitman wants to take the company in a more conservative and decisive direction. “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,” Whitman said.