HP barely squeaked by analyst expectations in its fourth quarter earnings, but the bigger news today is that the company was forced to take a $8.8 billion charge over accounting irregularities with its enterprise software outfit Autonomy.

Yes, that’s after HP paid $11.1 billion for UK-based Autonomy last year, and it’s on top of the $8 billion goodwill write off the company announced back in August. Altogether, HP announced almost $17 billion worth of charges this year over companies purchased by past CEOs.

The company said the Autonomy charge was over “serious accounting improprieties” — and I’m sure this isn’t the last we’ve heard of this story. It could have been worse, if HP was completely unaware of the accounting issues, or if it tried to bury the story, investors would have even less faith in the software giant.

Update: In a later statement on the Autonomy situation, HP said that it launched an internal investigation after a senior-level member of Autonomy’s management team came forward and noted that there had been “a series of questionable accounting and business practices at Autonomy prior to the acquisition by HP.”

And for the kicker, the accounting issues may have led to HP paying a lot more for Autonomy than it was actually worth. From HP’s statement: “As a result of that investigation, HP now believes that Autonomy was substantially overvalued at the time of its acquisition due to the misstatement of Autonomy’s financial performance, including its revenue, core growth rate and gross margins, and the misrepresentation of its business mix.”

On its earnings call with investors this morning, HP chief executive Meg Whitman said “the two people who should have been responsible for the problems are gone” — referring to former HP CEO Leo Apothekar and chief strategy officer Shane Robinson. She later added that HP’s internal investigation is ongoing, and it has also turned over the case to the SEC in the U.S., and the Serious Fraud Office in the United Kingdom. While a solution will likely take some time, Whitman said the company will figure out a way to make it up to investors.

On the bright side, HP’s earnings per share for Q4 were $1.14, slightly up from analyst estimates of $1.12 per share. Revenues were $30 billion for the quarter, down 7 percent from a year ago, and around $500 million less than what analysts were expecting.

Here’s HP’s official statement on the Autonomy fiasco:

HP is extremely disappointed to find that some former members of Autonomy’s management team used accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company, prior to Autonomy’s acquisition by HP. These efforts appear to have been a willful effort to mislead investors and potential buyers, and severely impacted HP management’s ability to fairly value Autonomy at the time of the deal. We remain 100 percent committed to Autonomy and its industry-leading technology.

Photo: Devindra Hardawar/VentureBeat

Hewlett-Packard saw the departure of 4,000 employees during its third fiscal quarter, a faster rate of decline than originally predicted by the technology giant as it cuts back on its expenses.

Meg Whitman, the chief executive of HP, disclosed the updated numbers in an earnings conference call with analysts this afternoon. She said that HP now expects about 11,500 employees to depart this fiscal year, ending Oct. 31, compared to the previous estimate of 9,000 employees.

HP hopes to cut its employee count by 27,000 employees by the end of 2014. HP currently has around 350,000 employees. (it did not update the number; last October, it was 349,600.) HP also did not say how many employees joined the company during the quarter.  The headcount is interesting in part because HP is one of the biggest tech employers, and its inflow and outflow of employees affects the overall job market, particularly in Silicon Valley.

HP hit its earnings targets for the third fiscal quarter that ended at the close of July, but it reported a historic GAAP-based loss of $8.9 billion, the biggest loss in HP’s 73-year history, thanks to a big write-off in its services division.

Whitman said in the call that the company was making progress in becoming more efficient, becoming easier to do business with, and easier to understand. She said the challenges to its financial performance continue to be tough macroeconomics, tough industry trends, and execution issues. She said the rate of revenue declines are slowing and that HP is “still in the early stages of our turnaround.”

The company is realigning its sales force, and this is impacting results in the near term. Segments that grew during the quarter included storage, networking, commercial printer ink sales, and “hyperscale” services. Pricing in hardware is still challenging, but HP believes it gained market share in high-end PC sales. The headwinds will continue in the fiscal fourth quarter, so the company now predicts its earnings per share to be at the low end of the previously predicted range.

The mainstream server business continues to be weak. Ink sales are improving through a new affordable pricing plan in emerging markets. HP is pushing heavily into cloud businesses, and it has 750 customers for its HP Cloud System service. It has, for instance, targeted cloud services at airline companies.

Cathie Lesjak, HP’s chief financial officer, said that its Autonomy division, acquired for $10 billion, still requires a lot of attention.

HP closed the quarter with $9.9 billion.