Hewlett-Packard Co. said it would write down the value of its technology-services business by about $8 billion, underscoring both industry changes and singular pressures plaguing the company.

The charge is one of the largest by a U.S. technology company, and an acknowledgment that H-P's $13.9 billionacquisition of Electronic Data Systems Corp. four years ago didn't work out as intended.

H-P will now post its largest quarterly net loss -- near $9 billion -- when it reports results later this month. But H-P also said it expected its earnings excluding the one-time items to exceed its previous forecast.

H-P's services business, now the company's second biggest revenueproducer behind computers, absorbed EDS in 2008 to smooth out the occasional volatility in tech hardware sales and help the company compete more effectively with International Business Machines Corp.'s tech-services division.

EDS was known for outsourcing activities such as taking over management of customers' computing operations. Its clients include state Medicaid programs and corporations like 3M Co. After the deal, then-chief executive Mark Hurd cut thousands of jobs in the unit and other costs to boost profitability.

But industry trends worked against H-P. The outsourcing model practiced by EDS requires substantial upfront investment in facilities, equipment and people, with H-P typically making money when customers sign large, long-term contracts. But such deals are declining, said Peter Bendor-Samuel, CEO of outsourcing-consulting firm Everest Group.

Competition from companies in India and other countries has also driven down prices. At the same time, some customers are gravitating toward newer services -- using a model known as cloud computing -- that run individual operations like accounting and finance for companies over the Internet.

'H-P is in a very difficult situation,' said Mr. Bendor-Samuel. 'This storm is nothing compared to the storm on the horizon.'

The services business contributed $36 billion of H-P's $127 billion in total revenue during the fiscal year ended last October. In the April quarter, services revenue declined 1% from the year-earlier and operating profit in the group fell 27%.

H-P has been trying to boost the business with its own offerings in areas such as cloud computing and by signing fewer, more profitable deals. But H-P has said the turnaround could take about three to five years. 'It's a journey, and we have a lot of work ahead of us,' Chief Executive Meg Whitman said during the company's May earnings call.

The services business is one of several challenges facing H-P. Personal-computer sales aren't growing like they did; consumers are printing less, hurting sales of H-P printers and ink; and a feud with Oracle Corp., among other issues, has hurt sales of large servers to businesses.

H-P's stock is still down 37% over the past year and about 60% since H-P said it would buy EDS.

'A lot of investors are starting to give up,' said Evercore Partners analyst Rob Cihra. 'Not because they see H-P going away but because they see the problems getting worse, not better.'

Ben Worthen / Shara Tibken