Hewlett-Packard New Zealand plunged to an $8.9 million loss as it grappled with its impending merger with EDS.
The result is the subsidiary's worst on public record.
Sales revenues fell 10.5 percent to $538 million.
Hewlett-Packard New Zealand merged with EDS New Zealand on November 1, at the end of the reporting period. The two businesses had been operating as a single enterprise for much of the year, after Hewlett-Packard's US$13.9b (NZ$20b) worldwide takeover agreement with EDS in 2008.
The subsidiary's results reveal the extent of severe cost cutting within the business.
Its wage bill dropped 15 percent to $61.8m and the company forked out $2.2m on termination benefits.
Cost-cutting and redundancies at EDS last year are believed to have been at least as deep.
The two companies had a combined New Zealand work force of about 3000 when the global merger was announced, but have since refused to provide details of local job numbers.
Further challenges lie ahead this year, as Telecom puts a massive information technology outsourcing contract won by EDS in 2001 back out to tender.