Even though Hewlett-Packard Co. has agreed to buy Electronic Data Systems Corp., EDS isn't going to disappear in a $13.9 billion puff of smoke.

H-P's outsourcing division will be renamed "EDS – an HP company" and EDS will remain headquartered at its offices in Plano.

But job cuts of some form are a certainty.

EDS chairman, president and chief executive Ron Rittenmeyer, who will remain in charge of the EDS division at H-P, declined in an interview to talk about specific layoff numbers.

But he said H-P and EDS, which has about 7,200 workers in the Dallas area, don't have much overlapping business, suggesting that layoffs may not be severe.

Some analysts do predict more dramatic cutbacks, though.

"This is very positive for the employees and the clients and the shareholders," Mr. Rittenmeyer said. "We would not have gone down this path if we didn't think this didn't have real value for everybody and for the community."

He said EDS' board had several discussions about the buyout.

"We analyzed it, we looked at it, we debated it for several meetings," he said. "It was not a one-meeting decision."

The deal is a boon to EDS shareholders, who have seen the company's stock languish recently as sales have flattened.

Under the terms of the deal, H-P will buy EDS for a total of $13.9 billion, including $25 per share in cash and the assumption of debt.

Shares of EDS rose 26 cents to close at $24.34 Tuesday after soaring nearly 30 percent Monday, when the news broke.

Shares of H-P fell more than 5 percent, though, as some investors wondered whether H-P had overpaid or missed out on buying a faster-growing India-based services company.

The boards of both EDS and H-P have approved the purchase, which is expected to close in the second half of 2008.

Mr. Rittenmeyer said he agreed to stay on after Mark Hurd, H-P's CEO, asked him to.

"I have a responsibility to this organization to see it through," Mr. Rittenmeyer said.

"I really like what I do," he added. "Second, I like Mark Hurd personally. I think he's a real professional, and I think our skills are complementary in a lot of ways."

But Mr. Rittenmeyer, 60, said he probably will retire in the next few years.

H-P said the acquisition would more than double its revenue from business and computer services, which totaled $16.6 billion in 2007, making the company more competitive with the service offerings of rival IBM Corp.

But Mr. Hurd made it clear during conference calls with analysts and reporters Tuesday morning that eliminating redundant costs – particularly administrative functions – is necessary to make the deal profitable for H-P.

Mr. Rittenmeyer said EDS was already looking to reduce its headcount before the H-P purchase materialized.

"In terms of job cuts, we are continuing to streamline our workforce at EDS," Mr. Rittenmeyer said during the call. "We've been doing that for some time. There obviously are going to be some changes. We had plans for that this year."

Research and consulting firm Technology Business Research Inc. is predicting fairly substantial cuts.

The firm noted that H-P's services division and EDS will have a combined headcount of about 209,000 workers.

"The addition of EDS will be a drag on [H-P's service] margins, and CEO Hurd will be aggressively targeting efficiencies," the research firm said in a note. "TBR expects that initial headcount reductions will be at least 10% to 15% of the combined headcount."

That would mean 20,000 job cuts or more, although the consulting firm didn't speculate on how those cuts would be divided between EDS and H-P employees.

EDS has about 48,000 workers in the U.S. and 140,000 worldwide.

Mr. Rittenmeyer also declined to talk about which members of EDS's senior management team will make the transition to H-P.

Mr. Rittenmeyer said one of his goals is to keep EDS running as a standalone company while the buyout makes its way through regulatory approvals and a shareholder vote.

"The last thing we want to do is lose the value of this corporation or weaken the jobs for the people who are here," Mr. Rittenmeyer said.

He said employees nervous about their jobs should have a similar focus.

"Great people will keep jobs," he said. "Great people never have to worry. If people slack off, we will deal with that the same as if there were no offer."

Some things won't change even after the purchase goes through.

In addition to maintaining the Plano headquarters and the EDS brand, Mr. Rittenmeyer said, EDS will continue to be the main sponsor of the annual Byron Nelson Championship golf tournament in Las Colinas.

"We're still going to be a major player in this community," he said.